Irish Central Bank Agrees 3,252,618 Euro Fine With Coinbase Over Safeguarding Failures
Key Facts
The Central Bank of Ireland agreed with Coinbase Ireland Limited on a fine of 3,252,618 euros as part of an October 2026 settlement over failures in safeguarding customer funds and outsourcing. According to the central bank, the breaches ran from 1 November 2020 to 19 August 2025 and covered safeguarding arrangements and related governance. The case concerns the group's electronic money institution in Ireland, whose management of its obligations to customers came under regulatory scrutiny. The breaches centred on safeguarding those funds, local oversight of outsourced functions and reporting material changes to safeguarding arrangements. The settlement thus addresses the Irish entity's responsibilities for the funds it is required to safeguard and for monitoring operations carried out on its behalf by other group companies.
The central bank's settlement notice revealed that the customer funds safeguarding account recorded a daily shortfall for at least 18 months. The maximum daily shortfall reached 3.4 million euros during 2023, then rose to 5.2 million euros during 2024. The average daily shortfall amounted to 0.54% of customer funds safeguarding liabilities over the period covered by the shortfall calculation. Meanwhile, the liabilities the company was required to safeguard averaged 323 million euros in 2023. Those liabilities rose to an average of 470 million euros in 2024, according to the same notice. The increase in the amount of funds requiring protection between the two years was accompanied by a rise in the maximum daily gap in the safeguarding account, while the percentage average reflected the shortfall relative to the liabilities included in the calculation.
Detailing the causes of the failures, the central bank found that the company had outsourced the safeguarding function to a company within the U.S. group without sufficient local oversight and expertise. The settlement notice identified shortcomings in the Irish entity's monitoring of the function after outsourcing it to the group company. It also identified errors in the systems used and in the calculation of safeguarding liabilities, which determine the funds required to cover those liabilities. The findings also included weaknesses in testing controls related to safeguarding arrangements, alongside shortcomings in reporting changes to those arrangements. Responsibility for compliance remained with the Irish unit, including oversight of functions outsourced to the U.S. group and supervision of their execution.
Coinbase said in its statement on the settlement that it had self-reported several issues to the central bank in January 2024. It stressed that the historical practices had not resulted in actual customer losses, saying: "No customer suffered a financial loss or was denied access to their funds." The company added that it had fully remediated the historical issues and strengthened the related technical controls. Remedial measures included redesigning the calculation of safeguarding liabilities to make errors in the data feeding into the calculation easier to detect. Coinbase Ireland said it had also added a guarantee bond worth 25 million euros as an additional safeguarding mechanism. The remedial measures announced by the company combine changes to calculations and technical controls with the addition of the guarantee bond to safeguarding arrangements.
The case follows an earlier enforcement action by the central bank against Coinbase Europe Limited, a separate entity from Coinbase Ireland, which is covered by the current settlement. The fine in the Coinbase Europe case amounted to 21,464,734 euros, according to the Central Bank of Ireland. That penalty concerned failures in transaction monitoring for anti-money laundering and counter-terrorist financing purposes. The High Court confirmed the sanctions in the earlier case on 12 January 2026, completing their judicial confirmation stage. The transaction monitoring responsibilities addressed in the earlier case are separate from the safeguarding obligations and outsourcing oversight covered by the current settlement.
The central bank and Coinbase Ireland reached the current settlement on 21 October 2026, and its sanctions await High Court confirmation before taking effect. The financial penalty determined before application of the settlement discount was 4,646,597 euros, according to the central bank. The company received a 30% discount under the settlement, reducing the amount to the agreed fine. Coinbase Ireland accepted the sanctions, which include a reprimand alongside the financial penalty, according to the bank's statement. The next judicial step remains High Court confirmation of the sanctions, which the central bank described as "subject to confirmation by the High Court".