Coinbase Ireland fined $3.6 million over customer fund segregation, oversight failures

The Central Bank of Ireland has fined Coinbase Ireland €3.25 million for breaches of customer fund safeguarding and outsourcing rules under the Electronic Money Regulations, the regulator said in a statement on Thursday. 

According to the statement, the exchange admitted the violations on Oct. 21 and accepted a reprimand alongside the fine, which was reduced from €4.65 million under a 30% settlement discount. The sanctions require High Court confirmation before taking effect.

The Block reached out to Coinbase for comment.

Coinbase incorporated its Irish subsidiary in Dublin in July 2018. The company received an e-money license from the central bank nearly a year later in 2019 and secured virtual asset service provider registration from the regulator in 2022.

Customer funds 

The settlement notice published by the central bank said Coinbase's handling of customer funds, including daily safeguarding shortfalls, reached €5.2 million ($5.8 million) in 2024. 

The central bank said the exchange allowed customer funds to be mixed with money held by other Coinbase entities. For about 19 months, from March 2023 to October 2024, approximately 30 institutional clients deposited dollars into bank accounts held by Coinbase Inc., rather than accounts in the Irish entity's name. Funds belonging to some customers who migrated from Coinbase UK were also deposited into the UK entity's safeguarding account until Aug. 19, 2025. 

"CBIE could not demonstrate adequate internal control mechanisms to validate that Users' Funds were properly segregated and safeguarded because it was unable to accurately calculate how much it was obligated to safeguard on a daily basis," the notice read. 

The regulator said the failures could also have complicated the return of customer funds if Coinbase Ireland had become insolvent.

"Had CBIE become insolvent when the above referenced breaches of their safeguarding obligations were in being, then Users may not have been able to promptly and fully regain their funds," the notice read. This represents a fundamental failure to meet the Central Bank's expectations regarding wind-down strategy.

Overeliance on outsourcing 

Coinbase Ireland also relied heavily on its U.S. parent group's infrastructure without sufficient local expertise to oversee safeguarding, according to the notice. The central bank had raised governance concerns in letters issued in July 2022 and March 2023, but said the issues were not adequately resolved.

"CBIE also committed serious outsourcing breaches, demonstrating a lack of appropriate skills and experience to oversee the activities of safeguarding undertaken by the OSP, which ultimately had a material impact on its ability to safeguard, further compounding the issues arising," the regulator wrote. 

The exchange appointed a safeguarding officer in December 2024. The regulator's notice said the company remediated the identified shortfall in June 2024 and implemented a fix for the underlying data issue in October 2024.

The latest penalty follows a separate €21.5 million fine against Coinbase Europe in November 2025 after more than 30 million transactions went unmonitored, resulting in 2,708 late suspicious transaction reports.