Coinbase Hit with $23 Million Fine by Irish Regulators Over AML Compliance Gaps

Major crypto exchange faces regulatory reckoning as Ireland cracks down on anti-money laundering protocols.

Compliance Breakdown

Irish authorities discovered significant gaps in Coinbase's transaction monitoring systems—the kind of oversight that makes traditional bankers smirk into their morning coffee. The $23 million penalty represents one of the largest enforcement actions against a cryptocurrency firm in European markets this year.

Regulatory Scrutiny Intensifies

Financial regulators globally are tightening the screws on digital asset platforms that fail to meet established banking standards. Ireland's central bank joined the chorus of watchdogs demanding crypto players follow the same rules as traditional financial institutions.

Industry Wake-Up Call

The enforcement action sends a clear message to crypto exchanges operating in regulated markets: compliance isn't optional. While crypto enthusiasts champion decentralization, regulators remain firmly planted in the reality of financial oversight—proving once again that in finance, the only thing more certain than volatility is regulation.

Suspicious transactions and delays

Coinbase took almost three years to fully review the affected transactions. This late monitoring led to 2,708 Suspicious Transaction Reports being submitted to the Financial Intelligence Unit. The reports flagged potential criminal activity, including money laundering, fraud, drug trafficking, cyberattacks, and even child sexual exploitation. 

Coinbase acknowledged the breaches, admitting it had failed to monitor 30,442,437 transactions and lacked sufficient internal controls to prevent money laundering and terrorist financing, and that nearly 185,000 transactions required additional checks.

The two sides settled, with the Central Bank initially fining Coinbase Europe €30,663,906 (around $33.4 million). A 30% discount reduced the fine to the current amount. The sanctions have been accepted but still require High Court confirmation. 

Colm Kincaid, deputy governor of the Central Bank, emphasized the importance of robust monitoring systems in preventing financial crime. He noted that failures in such systems create opportunities for criminals, and crypto’s anonymity and cross-border features make it particularly attractive for illicit activity.

Kincaid added, “This is why it is especially important that firms engaged in crypto services have robust controls in place to identify and report suspicious transactions.” He stressed that any system failures must be reported promptly to the regulator so risks can be properly managed and mitigated.

Coinbase’s past penalties

This is not the first time Coinbase has been fined. The firm has faced regulatory fines in both Russia and the UK for breaches related to data localization and financial crime controls.

In 2023, a court in Moscow fined Coinbase 1 million rubles for failing to localize the data of its Russian clients, an offense attributed to Coinbase Ireland Ltd.

The first FCA sanction of its kind in the UK crypto sector was given to Coinbase’s CB Payments Limited last July 2024 for taking high-risk customers in violation of a 2020 financial crime agreement, involving $24.9 million in deposits and $226 million in transactions.

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