Ireland’s financial regulator has handed one of the largest cryptocurrency exchanges in the world a critical blow with a record-breaking fine amounting to €21.46 million. According to this enforcement notice by the Central Bank of Ireland against Coinbase Europe Limited, this is the highest fine imposed on any virtual currency service provider in the country. The record-breaking fine is a result of severe anti-money laundering unlawful practices that saw billions worth of transactions with suspicious undertones slide by undetected.
How Coinbase’s monitoring system catastrophically failed
The extent of this failure by Coinbase Europe is mind-boggling and is indicative of serious issues in overseeing cryptocurrency. During this period between April 2021 and March 2025, critical defects existed in Coinbase Europe’s transaction monitoring system such that more than 30 million transactions remained entirely unchecked. These unchecked transactions comprised about 31% of all transactions executed by Coinbase Europe during this time and had a cumulative value in excess of €176 billion.
The breakdown in surveillance created a scenario perfect for criminal exploitation on the cryptocurrency market. As a virtual asset service provider, it was incumbent on Coinbase Europe to monitor activity continuously and file Suspicious Transactions Reports (STRs) with Ireland’s Financial Intelligence Unit if it suspected any money laundering or terrorism-related activity. These failures demonstrate that law enforcement was left in the dark about activities on the market that could potentially threaten public security.
Crime types with probable links to surveillance gaps
Finally, this delayed monitoring revealed serious trends concerning criminal activity that had been undetected for several years. Such activities include suspicious transactions related to laundering, fraud-related activity, drug trafficking rings, cyber-attacks relating to malware and ransomware, and child sexual exploitation.
Why the penalty reflects Ireland’s regulatory stance
The Central Bank of Ireland’s imposing fine on such a heavy amount is evident testimony to the bright scaling up of cryptocurrency regulation in this country. The original amount imposed on it was over €30 million, but due to the settlement agreement between both parties with a 30% cooperative discount for Coinbase Europe, it was reduced to €21.46 million. This case is the 162nd outcome for Ireland’s central bank, with over €428 million worth of fines levied by this institution.
During this event, Deputy Governor Colm Kincaid pointed out that investment in cryptocurrency platforms is especially vulnerable because these platforms have innovative technological elements that allow for anonymization. Anonymization makes these platforms alluring for those with ill-intentioned activities conducted through traditional channels. Cross-border transactions involving cryptocurrency add to this challenge.
“If law enforcement is to be effective in fighting financial crime, it is necessary for it to rely on each regulated financial institution implementing a system capable of scrutinizing transactions and reporting suspicions. The absence of such a system in any financial institution gives a criminal a loophole to exploit.” – Colm Kincaid, Deputy Governor
Settlement agreement requires High Court confirmation
The imposed sanctions must now await affirmation by the High Court before becoming effective. This is the fourth settlement that has been made via new procedures put in place under the Central Bank Individual Accountability Framework Act 2023. This historic enforcement case is a clear warning for crypto exchanges operating in Europe. Coinbase has acknowledged that there have been ‘technical programming errors’ on its systems, but pointed out that these problems have all been fixed now.
The cryptocurrency market has long struggled with perceptions related to illicit activity and attempts to legitimize itself among conventional financial structures. What this particular situation highlights is that a failure to meet regulatory levels in terms of these objectives can result in harsh repercussions. As a means for identifying a clear direction on anti-money laundering strategies for cryptocurrency, this move by Ireland highlights what is expected in this area.