Coinbase Hit With $24.7M Fine After “Critical” Tech Errors Left Suspicious Transactions Unscreened

Core Points - Coinbase Europe Limited has agreed to pay a €21.5 million ($24.7 million) fine to the Central Bank of Ireland due to coding failures that left thousands of customer transactions unscreened for suspicious activity between 2021 and 2022 [1][3] - The failures affected approximately 31% of all transactions conducted by Coinbase Europe during the specified period, amounting to over $202 billion [2] - Coinbase identified three coding errors that caused five of its 21 transaction monitoring scenarios to malfunction, leading to partial screening of certain transactions [3][5] - A review led to the re-analysis of around 185,000 transactions out of approximately 97 million processed, resulting in about 2,700 suspicious transaction reports (STRs) filed with Irish authorities, covering a total value of €13 million [4] - The Central Bank's decision was influenced by Coinbase's average annual revenue in Europe, estimated at €417 million between 2021 and 2024 [5] - Coinbase has since fixed the coding flaws and strengthened its monitoring systems and compliance checks to prevent future lapses [5] - In 2023, Coinbase selected Ireland as its European hub, enabling operations across all 27 EU member states once the Markets in Crypto-Assets (MiCA) regulation takes effect [6] - The settlement adds to a series of regulatory challenges faced by Coinbase's international entities, including a £3.5 million ($4.5 million) fine imposed on its UK-based subsidiary for breaching restrictions on onboarding high-risk customers [7] - The FCA found that the UK subsidiary provided e-money services to over 13,000 high-risk customers, who collectively transferred nearly $226 million through Coinbase-linked platforms despite the restrictions [8]