Central Bank of Ireland fines Coinbase unit €3.25m over safeguarding failures

The Central Bank of Ireland has fined Coinbase Ireland Limited €3.25 million for failures in safeguarding customer funds and for excessive reliance on its US parent to run compliance functions it was meant to control itself, the regulator said. The penalty, announced a day after a settlement with the subsidiary, covers breaches of Ireland's Electronic Money Regulations between November 2020 and August 2025 and awaits confirmation by the High Court.

Coinbase Ireland is an e-money institution that issues the euro and dollar balances European customers use to buy bitcoin and other crypto assets on the Coinbase platform. Under the rules those balances must sit in dedicated safeguarding accounts, separated from corporate money and from the funds of customers of other Coinbase entities.

The Central Bank found three failures: excessive reliance on the US group to design and run safeguarding controls, without local expertise to oversee the work; a safeguarding account underfunded "for lengthy periods of time" because of poor system design and weak control testing; and no adequate process for notifying the regulator of material changes to safeguarding practices. Karen O'Leary, the Central Bank's director of enforcement, said the firm had promised "robust and automated safeguards" when it sought authorisation in 2019, and that failing to adhere to those assurances or to report material changes was "completely unacceptable". The base penalty was set at €4.65 million with a 30% discount for settling; the regulator said the outcome was its 164th enforcement action and took its lifetime fines past €432 million.

Coinbase said it self-reported many of the issues in January 2024 and fixed most of the underlying control problems that year, stressing that no customer lost money or access to funds. It described five problem areas, including directing 30 customers to deposit dollars into a Coinbase, Inc. account at another US bank during the March 2023 banking crisis, and euro withdrawals for US and UK customers of other Coinbase units being paid at times from the Irish safeguarding account. Coding errors in an internal dashboard left the account underfunded by an average of roughly 0.54% of its obligation through 2023 and the first half of 2024, the company said. A spokesperson told Reuters the issues "largely arose in the context of Coinbase taking steps to protect customers during periods of significant disruption". Coinbase said it has since redesigned its safeguarding calculation, passed two third-party validations, posted a €25 million guaranty bond and hired a dedicated head of safeguarding.

The fine is the second imposed on a Coinbase entity in Ireland in a year, following a €21.5 million penalty on Coinbase Europe in November 2025 over failures to monitor more than 30 million transactions for money laundering and terrorist financing risk. That unit's Irish registration lapsed at the end of 2025 as the exchange moved its European headquarters to Luxembourg under a MiCA licence. Coinbase is the largest US crypto exchange and the world's biggest custodian of bitcoin, holding coins on behalf of most US spot bitcoin ETFs.