Central Bank of Ireland Fines Coinbase Ireland 3.25 Million Euros Over Customer Fund Safeguarding

The Central Bank of Ireland fined Coinbase Ireland 3.25 million euros, about $3.6 million, over alleged breaches of its safeguarding and outsourcing obligations. The regulator said the firm did not build an adequate governance framework for outsourced services and leaned too heavily on its US-based parent group to run safeguarding processes and controls. It also said customer funds were not properly protected because of weak system design and insufficient testing of controls. These rules exist so that customer money is kept fully funded and monitored, with procedures to alert the regulator when material changes occur.

What Went Wrong With Coinbase Customer Funds

In a statement after the announcement, Coinbase explained that in 2023, when Silvergate was close to collapse, it told 30 customers to deposit funds into an alternate account it held at another US bank. Those funds ended up alongside money belonging to customers of another Coinbase entity, which breached safeguarding requirements. The company also pointed to euro withdrawals for US and UK customers being paid from the Irish safeguarding account, and to coding errors that left the account underfunded by an average of 0.54% in 2023 and the first half of 2024. Coinbase said no customer lost money or lost access to their funds.

Second Irish Penalty in Under a Year

The fine follows a 21.4 million euro penalty imposed on Coinbase Europe almost a year ago for breaching anti-money laundering obligations between 2021 and 2025.