Ireland's central bank hit Coinbase Ireland with a €3.25 million penalty, saying internal control weaknesses led to breaches of customer fund protection rules. The bank said Coinbase Ireland "failed to have in place an adequate outsourcing governance framework" and that "They placed excessive reliance on the US-based Coinbase Group as an outsourced service provider to implement safeguarding processes."
Coinbase's spokesperson said the 2023 shift to alternative Coinbase bank accounts aimed to protect customers during turmoil in the US banking system and "helped to protect customers." The spokesperson also acknowledged that this meant funds were "being mixed with funds held for other Coinbase entities, which was not in line with regulatory safeguarding requirements."
The central bank cited system design problems and "insufficient control testing" that, in turn, left Coinbase Ireland's designated safeguarding account short of funds for lengthy stretches.
"These issues largely arose in the context of Coinbase taking steps to protect customers during periods of significant disruption," the spokesperson added, while noting: "No customers suffered financial loss or were unable to access their funds as a result of these issues."
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About a year earlier, the same authority fined Coinbase Europe €21.5 million, after a 30% settlement discount, for violations tied to monitoring transactions for anti money laundering and counter terrorist financing.
Coinbase's spokesperson says customers did not lose money and could access their funds. Still, the regulator's findings signal tighter scrutiny of crypto firms' cash controls, and that process lapses can translate into fines and headline risk. The bottom line: compliance is becoming a competitive cost of doing business in crypto, and that can shape margins and sentiment for listed and private players alike.
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