Coinbase Slapped With $24.7M Fine for ’Critical’ Tech Failures—Suspicious Transactions Slipped Through Unchecked
Regulators drop the hammer on crypto giant after compliance systems crumble.
When your surveillance tech fails harder than a DeFi project in a bear market...
The $24.7 million penalty—chump change for a company that made $3B last quarter—comes after 'critical' system errors allowed potentially illicit transactions to bypass screening. No wonder regulators are treating crypto exchanges like toddlers with grenades.
Active monitoring? More like actively missing red flags. While Coinbase claims it's 'enhanced systems,' the damage is done—another black eye for an industry that can't seem to stay out of its own way. Maybe next quarter's earnings call will feature less compliance theater and more actual compliance.
Coinbase Strengthens Controls After €21.5M Fine for Transaction Monitoring Errors
Coinbase disclosed the settlement in a blog post on Thursday, confirming that it had cooperated fully with the regulator.
The company said the problem stemmed from three coding errors that caused five of its 21 transaction monitoring scenarios to malfunction, leading to only partial screening of certain transactions.
As part of the review, Coinbase re-analyzed around 185,000 transactions out of approximately 97 million processed in total.
The re-screening resulted in about 2,700 suspicious transaction reports (STRs) being filed with the Irish authorities, covering a combined value of €13 million.
Coinbase said the settlement does not suggest that any of the flagged transactions were confirmed to involve criminal activity.
The Central Bank’s decision was based on Coinbase’s average annual revenue in Europe, estimated at €417 million between 2021 and 2024.
The exchange said it fixed the coding flaws within weeks of discovery and has since strengthened its monitoring systems and compliance checks to avoid similar lapses.
Coinbase Europe, which opened its Dublin office in 2018, has been expanding its presence across the EU ahead of the bloc’s Markets in Crypto-Assets (MiCA) regulation.
In 2023, the company selected Ireland as its European hub, allowing it to operate across all 27 EU member states once MiCA takes effect.
Coinbase’s European Units Under Pressure Amid Expanding AML Crackdowns
The settlement in Ireland adds to a series of recent regulatory challenges facing Coinbase’s international entities.
In July 2024, Coinbase’s UK-based subsidiary, CB Payments Limited, was fined £3.5 million ($4.5 million) by the Financial Conduct Authority (FCA) for breaching a voluntary restriction that prohibited it from onboarding high-risk customers.
The FCA found that CB Payments provided e-money services to over 13,000 such customers, who collectively transferred nearly $226 million through Coinbase-linked platforms despite the restriction.
The FCA action marked the first enforcement under the UK’s Electronic Money Regulations 2011, raising concerns about broader regulatory scrutiny of crypto firms in Britain.
Legal experts later described the MOVE as a “one-off” case rather than the start of a sector-wide crackdown.
Across Europe, authorities have also been tightening anti-money laundering (AML) oversight of crypto platforms ahead of MiCA’s full rollout.
In France, regulators have been conducting on-site AML inspections of dozens of registered digital asset firms, including Binance and Coinhouse, to determine which entities meet the standards for EU-wide licenses.
France conducts AML inspections on Binance and Coinhouse among 100+ entities for MiCA licenses with only 4 firms approved before June 2026 deadline.#France #Binance #Coinbasehttps://t.co/AhYNEuNmzi
The French Prudential Supervision and Resolution Authority (ACPR) has reportedly instructed Binance to enhance its risk controls during these inspections.
Regulators in France, Austria, and Italy have also called for the EU’s top markets watchdog to directly supervise major crypto exchanges amid concerns about inconsistent enforcement across member states.
Coinbase, for its part, emphasized in its statement that it has taken comprehensive steps to strengthen its transaction monitoring systems.
The company has expanded its testing protocols, introduced additional layers of internal oversight, and added new monitoring scenarios to detect high-risk activity.
“Coinbase recognizes the importance of effective AML procedures and takes our obligations under AML legislation and regulatory guidance very seriously,” the company said, reiterating its goal of building “the most trusted, compliant, and secure platform in the world.”
