Coinbase agrees to pay a fine to the Central Bank of Ireland… acknowledges transaction monitoring error

Coinbase's European unit, Coinbase Europe (Coinbase Europe Limited), agreed to pay the Central Bank of Ireland a fine of €21.5 million (about $24.7 million) due to an error in its transaction monitoring system.

On the 6th (local time), according to CoinDesk, Coinbase will pay a €21.5 million fine to the Central Bank of Ireland. The sanction relates to a coding error that occurred between 2021 and 2022, which caused some transactions to be omitted from suspicious activity monitoring. Coinbase said it discovered the issue through internal testing, fixed it within weeks, and re-reviewed all related transactions.

In the process, the company reported about 2,700 out of a total 185,000 transactions as suspicious, totaling about $15 million. However, Coinbase explained that "Suspicious Activity Reports (SARs) do not indicate illegal activity and are a mandatory action under anti-money laundering (AML) laws."

According to the local outlet the Irish Independent, the total value of transactions reviewed at the time amounted to $202 billion, which accounted for about 31% of Coinbase Europe's total transactions during the period.

The Central Bank of Ireland calculated the fine based on Coinbase Europe's average annual revenue from 2021 to 2024 ($480 million). The investigation found three coding errors across five of the 21 transaction monitoring scenarios, and confirmed that addresses containing certain special characters were omitted from the filters.

Coinbase said it has since strengthened testing and oversight of its transaction monitoring system. The improvements include strengthened pre-deployment reviews, expanded test coverage, and improved detection capabilities for high-risk activity.

In a blog post, Coinbase emphasized, "We recognize the importance of anti-money laundering procedures and take our legal and regulatory obligations very seriously."