Coinbase Ireland hit with €3.25m CBI fine

Irish regulator imposes €3.25m penalty on Coinbase unit

The Central Bank of Ireland has fined Coinbase Ireland €3.25m for breaches of safeguarding and outsourcing obligations under the Electronic Money Regulations 2011 between November 2020 and August 2025. The sanction includes a reprimand and a monetary penalty originally set at €4,646,597, reduced to €3,252,618 through the application of a 30% settlement discount.

Coinbase Ireland is a licensed electronic money firm within the wider Coinbase Group, providing crypto asset and wallet services that enable customers to buy and sell crypto assets through its trading platform. The latest enforcement action focuses on how the Irish entity managed the safeguarding of customer funds and its reliance on group functions.

Findings on safeguarding failures and outsourcing

The Central Bank found that Coinbase Ireland failed to have in place an adequate outsourcing governance framework and placed excessive reliance on Coinbase Group in the US to implement safeguarding processes and controls to meet Irish and EU regulatory requirements. The outsourcing of the safeguarding function and overreliance on the US parent were found to have materially impaired the quality of the Irish unit’s internal safeguarding controls.

Regulators concluded that the company did not adequately safeguard customers’ funds, citing inadequate system design, insufficient control testing and a failure to maintain sufficient local skill and expertise to oversee the core function of managing and safeguarding customer funds at all times. The firm allowed its designated safeguarding account to be underfunded for lengthy periods, and it lacked adequate internal control and escalation procedures and sufficient governance processes to identify and report material changes concerning safeguarding.

The Central Bank also found that for a period of four years Coinbase Ireland allowed users’ funds to be mixed with funds held elsewhere, despite having committed at the time of its 2019 authorisation to robust and automated safeguards. This commingling increased the risk of loss of customer funds, although no customers ultimately suffered financial loss or were unable to access their funds as a result.

Coinbase Ireland’s explanation and remediation steps

In a statement, Coinbase Ireland said it had strengthened its safeguarding controls, redesigned its calculation processes and added dedicated expertise to prevent similar issues from recurring. The company said that several of the breaches arose as it took steps intended to protect customers during periods of significant disruption in the wider financial system.

During the 2023 US banking crisis, Coinbase Ireland directed customers to deposit funds into alternative bank accounts held by Coinbase Inc to protect them from potential losses arising from bank failure. While this move was described as protecting customers from financial loss and disruption, it led to customers’ funds being mixed with funds held for other Coinbase entities, which did not align with regulatory safeguarding requirements.

Following Brexit, Coinbase Ireland said it repeatedly instructed customers to use its Irish bank account for future deposits, but some continued to use legacy UK bank accounts. Funds deposited in those accounts did not comply with regulatory safeguarding requirements. The firm stated that it self-identified and reported several of these issues to the Central Bank in January 2024, addressed the vast majority of the underlying control issues that year and has since fully resolved them.

Context of repeat enforcement action

This is the second time the Central Bank has fined Coinbase’s Irish unit. In November 2025, the regulator imposed a €21.5m fine on Coinbase Ireland for breaching anti-money laundering and counter-terrorist financing transaction monitoring obligations related to the period between April 2021 and March 2025. The latest action underscores the Central Bank’s focus on firms maintaining appropriate culture, expertise and governance to comply with regulations, respond to risks and protect customer interests.