Coinbase Ireland agrees to a customer-fund safeguarding penalty
Coinbase Ireland has agreed to a reprimand and a 3.25 million euro fine over failures in safeguarding customers' electronic money. Ireland's central bank found prolonged underfunding and insufficient local oversight of outsourced controls. The settlement includes an early-resolution discount, while the sanction requires High Court confirmation before it can take effect.
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Coinbase Ireland accepts a sanction requiring court approval
Coinbase Ireland, the group's electronic money institution in Ireland, accepted a settlement over failures to safeguard customer money and oversee outsourced controls. The Central Bank of Ireland announced the agreement on October 22. A reprimand and financial penalty require High Court confirmation before taking effect.[1], [2]
The agreed fine is 3,252,618 euros. Coinbase Ireland admitted breaches of the European Communities' Electronic Money Regulations 2011 between November 1, 2020 and August 19, 2025. The parties did not dispute the underlying facts or contraventions. They reached the settlement on October 21.[1]
Safeguarding accounts remained underfunded for prolonged periods
Coinbase Ireland issues electronic money and redeems it for customers using the group platform. Customers use that service to purchase crypto assets with fiat money, the conventional money used for those payments. The regulator found prolonged underfunding in the accounts intended to safeguard that money. Its findings concerned the institution's handling of customers' funds and the controls governing those arrangements.[1]
The bank identified excessive dependence on controls outsourced to the group's US parent. Coinbase Ireland lacked sufficient expertise locally to oversee those arrangements, and testing of the systems and controls was inadequate. Internal escalation and governance arrangements were also insufficient for reporting material changes to the regulator. Enforcement director Karen O'Leary stressed safeguarding and local accountability for outsourced work.[1]
Early settlement reduces the fine by 30 per cent
Before the early-settlement discount, the penalty was 4,646,597 euros. The reduction of 30 per cent was the maximum discretionary discount available under the process. The bank described the case as its fifth administrative-sanctions settlement following the 2023 individual accountability legislation.[1]
It brought the total number of enforcement settlements to 164, with aggregate fines exceeding 432 million euros. The High Court can send a sanction back for reconsideration if it judges it manifestly disproportionate. The central bank emphasized that institutions retain their own control obligations when outsourcing work.[1]
