A Costly Compliance Breakdown
Key Highlights:
• The Central Bank of Ireland fined Coinbase Europe €21.5 million after over 30 million transactions worth €176 billion went unmonitored between 2021 and 2025.
• Regulators said the failures exposed Coinbase to major financial crime risks, citing weak transaction monitoring and delayed suspicious activity reports.
Yello Paradisers! Coinbase’s European arm is under fire after the Central Bank of Ireland imposed a €21.5 million fine for what it called “serious and systemic” Anti-Money Laundering (AML) breaches.
The regulator found that between April 2021 and March 2025, Coinbase’s transaction monitoring system malfunctioned, leaving over 30 million transactions, totaling €176 billion, unchecked for suspicious activity.
Auditors traced the issue to three coding errors in Coinbase’s monitoring system that failed to analyze certain crypto wallet addresses containing special characters. These technical flaws persisted for years before being identified, creating what regulators described as a major blind spot in Coinbase’s AML defenses.
While the company said no customer assets were affected, the Central Bank’s investigation concluded that Coinbase failed to detect or report potential illicit transactions, breaching the European Union’s AML framework.
Inside the Regulator’s Findings
The Central Bank determined that Coinbase failed to submit required Suspicious Transaction Reports (STRs) to both the Financial Intelligence Unit (FIU) and Irish Revenue authorities on time. It took nearly three years for the exchange to fully review and reprocess the data, eventually filing 2,708 STRs after the fact.
Coinbase’s internal report revealed that 31% of all transactions during the affected period were not fully screened. Although the company fixed the coding faults within weeks of discovery, regulators criticized the length of time taken to identify, re-screen, and report the failures.
“Crypto platforms face heightened risks due to the speed and pseudo-anonymity of blockchain transfers,” the Central Bank said. “Continuous monitoring is not optional, it is fundamental to preventing misuse for money laundering or terrorist financing.”
The fine represents roughly 0.5% of Coinbase’s 2024 global revenue. The company accepted the penalty without contest and stated that it has strengthened internal controls and testing across its European Union operations.
MiCA and the New Era of Strict Oversight
The penalty lands amid the rollout of the EU’s Markets in Crypto-Assets Regulation (MiCA), which enforces uniform AML standards for all crypto-asset service providers (CASPs). Under MiCA, firms must conduct customer verification, monitor transactions in real time, and report suspicious activity promptly to national FIUs.
Coinbase’s lapse highlights how seriously European regulators are now taking compliance. Similar inspections are reportedly underway across multiple exchanges as authorities ramp up enforcement before MiCA’s full implementation in 2026.
Analysts say the case serves as a warning: technical failures won’t shield firms from liability under the EU’s new regime.
What’s Next — And Why It Matters
In our MCP YouTube stream, Simon will dissect how MiCA’s tougher AML landscape could reshape crypto exchange operations across Europe, and whether Coinbase’s fine signals a broader regulatory tightening that could impact liquidity and token listings.
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