Ireland fines Coinbase €3.25 million for safeguarding breaches

The Central Bank of Ireland announced an enforcement action against Coinbase Ireland on a Thursday. The regulator imposed a fine of €3,252,618, approximately $3.6 million, for breaching safeguarding and outsourcing rules. Coinbase Ireland admitted the prescribed contraventions and agreed to the undisputed facts regarding the action. The penalty reflects a 30% discount off a potential €4,646,597 fine for settling.

Regulators found that Coinbase Ireland relied too heavily on its U.S. parent for compliance and lacked local oversight expertise. The firm allowed its designated safeguarding account to be underfunded for lengthy periods. Coinbase Ireland also failed to flag material safeguarding changes to the regulator. The company improperly relied on its US company to outsource certain services. When Silvergate was on the verge of collapse in 2023, Coinbase instructed 30 customers to deposit funds into an alternate account held by Coinbase at another U.S. bank.

Karen O'Leary, the Central Bank's director of enforcement, stated that firms operating in Ireland must have the appropriate culture and expertise to comply with rules. She described failing to honor assurances made during authorization or to report material changes as completely unacceptable. This is the second Irish enforcement action against Coinbase's European business in less than a year. The Central Bank previously fined Coinbase Europe €21.5 million in May over anti-money-laundering failures.

Coinbase Ireland launched operations in Ireland in 2018 and received an e-money license from the central bank in 2019. The company secured registration as a virtual asset service provider in 2022. Coinbase Ireland is an e-money institution within the broader Coinbase Group issuing digital money customers use to buy crypto on the platform. The sanctions against Coinbase Ireland require approval from Ireland's High Court before taking effect.