Ireland’s central bank fined an Irish subsidiary of cryptocurrency
exchange Coinbase Global 21.5 million euros ($25 million) on Thur
sday for breaching anti-money laundering and counter-terrorist tran
saction monitoring obligations.
The Irish regulator said the fine related to faults in the configuration of Coi
nbase Europe’s transaction monitoring system, which resulted in more than 30 million transactions worth over
176 billion euros not being properly monitored over a 12-month period.
It added that it took Coinbase almost three years to fully complete the monitoring of the affected transactions, le
ading to the reporting o
f 2,708 suspicious tran
sactions to the authorities for further analysis and potential investigation.
The transactions contained suspicions associated with se
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rious criminal activities including money laundering, fraud, drug
trafficking, cyber attacks and child sexual exploitation, the central bank said.
Coinbase Says It Inadvertently Made Coding Errors
Coinbase Europe provides crypto asset and wallet services to customers globally to facilitate their use of the Coinba
se Group’s trading platform to buy and sell crypto assets, the central bank said.
Coinbase said in a statement that it inadvertently made three coding errors in its transaction monitoring system th
at caused five of the 21 scenarios which look for certain red flags to
not fully screen all transactions in 2021 and 2022.
It said it fixed the coding errors within two to three weeks of det
ecting them. As part of the settlement, Coinbase and the central bank c
annot say that the suspicious transactions cumulatively valued at 13
million euros actually resulted in criminal activity, it said.
Coinbase added that it has taken steps to prevent the types of errors
from happening again, including enhancing its testing and monitoring.
The fine was reduced from 30.7 million euros by way of a settlement discount and based on Coinbase Europe’s a
verage annual revenue of 417 million euros for the period.
“The failure of such a system within any financial institution creates an opportunity for criminals to evade detection – and
criminals will take that opportunity,” Irish Central Bank Deputy Governor Colm Kincaid said in a statement.
“Crypto has particular technological features which, together with its anonymity-enhancing capabilities and cr
oss-border nature, makes it especially attractive to criminals looking to move their funds.”
($1 = 0.8575 euros)