Key Takeaways
- • The Central Bank of Ireland fined Coinbase Ireland Limited €3.25 million ($3.65 million) for failing to safeguard customer funds and for relying excessively on its US parent to run controls it was required to oversee itself.
- • The regulator found three failures: excessive reliance on the US group, a safeguarding account underfunded for lengthy periods, and no adequate process to notify the regulator of material changes to safeguarding practices.
- • The base penalty was set at €4.65 million with a 30% settlement discount; the fine and reprimand still require confirmation from Ireland's High Court.
- • Coinbase said it self-reported many of the issues in January 2024, fixed most control problems that year, and said no customer lost money or lost access to funds.
- • The penalty is the second Irish fine against Coinbase entities in roughly a year, following a €21.5 million fine on Coinbase Europe in November 2025 for anti-money laundering monitoring failures.
Summary
The Central Bank of Ireland has fined Coinbase Ireland Limited €3.25 million ($3.65 million) over failures to safeguard customer funds, according to Bitcoin Magazine. The regulator announced the penalty on a Thursday, one day after reaching a settlement with the Coinbase subsidiary. The breaches ran from November 2020 to August 2025 under Ireland's Electronic Money Regulations. Coinbase Ireland, an e-money institution, issues the euro and dollar balances European customers use to buy bitcoin and other crypto assets, and the law requires those balances to be held in dedicated safeguarding accounts separate from corporate money and from customers of other Coinbase entities.
The Central Bank identified three failures. Coinbase Ireland placed "excessive reliance" on its US-based group to design and run safeguarding controls and lacked the local expertise to oversee that work. Its safeguarding account was underfunded "for lengthy periods of time" due to poor system design and weak control testing. The firm also lacked an adequate process to flag material changes in its safeguarding practices to the regulator. Karen O'Leary, the Central Bank's director of enforcement, said the firm had promised "robust and automated safeguards" when seeking authorisation in 2019 and that its practices drifted from those commitments without notice. "Failing to adhere to the assurances made during the authorisation process or to inform us of material changes as happened in this case is completely unacceptable," O'Leary said.
The Central Bank set the base penalty at €4.65 million and applied a 30% discount for settlement. The fine and reprimand await confirmation from Ireland's High Court. It is the regulator's 164th enforcement outcome, bringing lifetime fines past €432 million.
Coinbase said in a blog post that it self-reported "many of the items described in the settlement" in January 2024 and fixed most underlying control issues that year, stressing that no customer lost money or access to funds. The company described five problem areas. During the March 2023 U.S. banking crisis, as Silvergate Bank neared collapse, Coinbase Ireland directed 30 customers to deposit dollars into a Coinbase, Inc. account at another U.S. bank, commingling their funds with those of a separate Coinbase entity. After Brexit forced migration of European customers from the UK affiliate, some continued sending deposits to the old UK accounts. Euro withdrawals for U.S. and UK customers of other Coinbase units were at times paid from the Irish safeguarding account for liquidity reasons. Coding errors in an internal dashboard left the account underfunded by an average of roughly 0.54% of its total obligation through 2023 and the first half of 2024. A daily "Treasury Rebalancing Process" moved funds back into the correct account but did not prevent the initial commingling. A company spokesperson told Reuters that "these issues largely arose in the context of Coinbase taking steps to protect customers during periods of significant disruption." The exchange said it has since redesigned its safeguarding calculation, passed two third-party validations with no open findings, posted a €25 million guaranty bond, and hired a dedicated head of safeguarding.
The penalty follows a €21.5 million fine the Central Bank imposed on Coinbase Europe in November 2025 for failing 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 shifted its European headquarters to Luxembourg under a MiCA license from the country's financial regulator. Coinbase is the largest U.S. crypto exchange and the world's largest custodian of bitcoin, holding coins on behalf of most U.S. spot bitcoin ETFs.
The Central Bank identified three failures. Coinbase Ireland placed "excessive reliance" on its US-based group to design and run safeguarding controls and lacked the local expertise to oversee that work. Its safeguarding account was underfunded "for lengthy periods of time" due to poor system design and weak control testing. The firm also lacked an adequate process to flag material changes in its safeguarding practices to the regulator. Karen O'Leary, the Central Bank's director of enforcement, said the firm had promised "robust and automated safeguards" when seeking authorisation in 2019 and that its practices drifted from those commitments without notice. "Failing to adhere to the assurances made during the authorisation process or to inform us of material changes as happened in this case is completely unacceptable," O'Leary said.
The Central Bank set the base penalty at €4.65 million and applied a 30% discount for settlement. The fine and reprimand await confirmation from Ireland's High Court. It is the regulator's 164th enforcement outcome, bringing lifetime fines past €432 million.
Coinbase said in a blog post that it self-reported "many of the items described in the settlement" in January 2024 and fixed most underlying control issues that year, stressing that no customer lost money or access to funds. The company described five problem areas. During the March 2023 U.S. banking crisis, as Silvergate Bank neared collapse, Coinbase Ireland directed 30 customers to deposit dollars into a Coinbase, Inc. account at another U.S. bank, commingling their funds with those of a separate Coinbase entity. After Brexit forced migration of European customers from the UK affiliate, some continued sending deposits to the old UK accounts. Euro withdrawals for U.S. and UK customers of other Coinbase units were at times paid from the Irish safeguarding account for liquidity reasons. Coding errors in an internal dashboard left the account underfunded by an average of roughly 0.54% of its total obligation through 2023 and the first half of 2024. A daily "Treasury Rebalancing Process" moved funds back into the correct account but did not prevent the initial commingling. A company spokesperson told Reuters that "these issues largely arose in the context of Coinbase taking steps to protect customers during periods of significant disruption." The exchange said it has since redesigned its safeguarding calculation, passed two third-party validations with no open findings, posted a €25 million guaranty bond, and hired a dedicated head of safeguarding.
The penalty follows a €21.5 million fine the Central Bank imposed on Coinbase Europe in November 2025 for failing 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 shifted its European headquarters to Luxembourg under a MiCA license from the country's financial regulator. Coinbase is the largest U.S. crypto exchange and the world's largest custodian of bitcoin, holding coins on behalf of most U.S. spot bitcoin ETFs.
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