Coinbase Europe Limited, the European branch of the American cryptocurrency exchange Coinbase, has reached a settlement of 21.5 million euros with the Central Bank of Ireland. The settlement follows technical problems in the company’s transaction monitoring system between 2021 and 2022. Due to a series of programming errors, some transactions were not fully monitored for suspicious activity.
According to Coinbase, the problems arose because of three coding errors in five of the 21 checks the system performs. As a result, certain crypto addresses – especially addresses with special characters – were not properly recognized. The company discovered the problem itself through internal testing, fixed the error within weeks, and then re-verified all affected transactions.
Research and consequences
The internal investigation found that approximately 185,000 transactions needed to be reassessed. These transactions had a combined value of more than $202 billion, representing approximately 31 percent of all Coinbase Europe transactions during that period. Ultimately, the crypto exchange filed approximately 2,700 reports of suspicious transactions with a total value of 15 million dollars. According to Coinbase, this did not involve proven illegal activity, but the reports were made as required under Irish anti-money laundering (AML) legislation.
The amount of the fine was determined based on Coinbase’s average annual turnover in Ireland between 2021 and 2024, estimated at $480 million. As a recognized provider of crypto services, Coinbase is required to maintain systems that can detect and report money laundering practices.
Improved control systems at Coinbase
Following the incident, Coinbase tightened its internal systems and procedures. The company introduced more stringent testing before new software updates, expanded its monitoring scenarios and implemented continuous assessments to identify new risks faster. These measures should prevent similar errors from occurring again.
In a statement, Coinbase emphasized the importance of reliable compliance with laws and regulations: “Coinbase recognizes the importance of effective anti-money laundering procedures and takes its legal obligations very seriously.”
Coinbase strengthens position in Europe
Coinbase opened an office in Dublin in 2018 and received an e-money license in 2019, a rarity in the crypto sector at the time. In 2023, the company officially chose Ireland as its European headquarters, ahead of the arrival of the new European MiCA regulations.
The Markets in Crypto-Assets (MiCA) legislation is due to come into force in 2025 and will provide a single harmonized regulatory framework for crypto companies within the European Union. This will soon allow Coinbase to offer its services in all 27 EU member states under one license, which gives the exchange a strong position in the European crypto market.
Source: https://newsbit.nl/coinbase-schikt-voor-215-miljoen-euro-met-ierse-centrale-bank-na-technische-storing/
