Ireland's central bank has fined Coinbase Europe EUR 21.5 million for breaching anti-money laundering and counter-terrorist transaction monitoring obligations.
Following this announcement, the Irish regulator mentioned that the fine related to faults in the configuration of Coinbase Europe's transaction monitoring system, which then resulted in more than 30 million transactions worth over EUR 176 billion not being properly monitored over a 12-month period.
In addition, officials of the institution also added that it took Coinbase almost three years to fully complete the monitoring of the affected transactions, leading to the reporting of 2,708 suspicious transactions to the authorities for further analysis or potential investigation. Furthermore, the payments also contained suspicions associated with serious criminal activities, including money laundering, fraud, cyber attacks, and more.
More information on Coinbase Europe’s EUR 21.5 million fine
According to Reuters, Coinbase said in a statement that it inadvertently made three coding errors in its transaction monitoring system that caused five of the 21 scenarios, which later looked for certain red flags to not fully screen all transactions in 2021 and 2022. At the same time, the company also said it fixed the coding errors within two to three weeks of detecting them. As part of the settlement, Coinbase and the central bank cannot say that the suspicious transactions cumulatively valued at EUR 13 million actually resulted in criminal activity.
Furthermore, Coinbase added that it has taken steps to prevent the types of errors from happening again, including its strategy of optimising its overall testing and monitoring processes. The fine was reduced from EUR 30.7 million by way of a settlement discount and based on Coinbase Europe's average annual revenue of EUR 417 million for the period.
