At a glance
- The Irish subsidiary of Coinbase Global failed to establish an adequate outsourcing governance framework, according to the CBI.
- The CBI said Coinbase Ireland placed "excessive reliance on the U.S.-based Coinbase Group as an outsourced service provider to implement safeguarding processes and controls."
- Coinbase said that when Silvergate, a crypto-friendly bank, was close to failing in 2023, Coinbase instructed 30 customers to deposit funds into an alternate account held by Coinbase at another U.S. bank.
The Central Bank of Ireland fined Coinbase Ireland 3.25 million euros ($3.6 million) over breaches of its safeguarding and outsourcing obligations, the regulator said on Thursday. The Irish subsidiary of Coinbase Global failed to establish an adequate outsourcing governance framework, according to the CBI.
The CBI said Coinbase Ireland placed "excessive reliance on the U.S.-based Coinbase Group as an outsourced service provider to implement safeguarding processes and controls." The regulator also said the firm "failed to adequately safeguard customers' funds, both through inadequate system design and insufficient control testing."
Coinbase said that when Silvergate, a crypto-friendly bank, was close to failing in 2023, Coinbase instructed 30 customers to deposit funds into an alternate account held by Coinbase at another U.S. bank. Those balances sat alongside money belonging to customers of a different Coinbase entity, an arrangement CoinDesk described as a breach of safeguarding requirements.
Coinbase also said euro withdrawals by U.S.- and U.K.-based customers were paid from Coinbase Ireland's safeguarding account. Coding errors left that account underfunded by an average of 0.54% across 2023 and the first half of 2024, per the company's account.
"No customer suffered any financial loss as a result of these matters, and no customer was ever unable to access their funds," Coinbase said.
The fine comes almost one year after the Central Bank of Ireland fined Coinbase Europe 21.4 million euros for breaching anti-money laundering obligations between 2021 and 2025. The 3.25 million-euro safeguarding penalty is less than a sixth of that earlier fine.
Reported by the Custody & Infrastructure desk from CoinDesk Policy. Published . Corrections