The Central Bank of Ireland has fined Coinbase Ireland €3.25 million ($3.6 million) for breaching customer fund safeguarding and outsourcing rules between November 2020 and August 2025.

According to the settlement notice published under the regulator's administrative sanctions procedure, the crypto exchange's Irish unit relied excessively on its US-based parent for safeguarding controls, lacked sufficient local expertise to oversee customer funds, and allowed its designated safeguarding account to remain underfunded for extended periods.

The breaches included arrangements that resulted in some customer funds being held alongside funds belonging to customers of other Coinbase entities, as well as technical errors that affected daily safeguarding calculations.

For customers, safeguarding rules are intended to ensure that funds remain protected and readily available for redemption, including when a firm relies on services provided by an international group.

“Payment and e-money firms have a fundamental obligation to fully safeguard customers’ funds,” said Karen O’Leary, the Central Bank of Ireland’s Director of Enforcement, adding that the regulator had “no tolerance for weaknesses in safeguarding arrangements.”

Coinbase said it had self-reported several issues and strengthened its controls. The company said no customers suffered financial losses or were unable to access their funds.

The fine reflects a 30% settlement discount and remains subject to confirmation by Ireland’s High Court. It follows a separate €21.5 million fine imposed on Coinbase Europe in 2025 over anti-money laundering compliance failures.

Regulator’s Expectations for Firms in International Groups

According to the Central Bank of Ireland, firms operating as part of larger international groups must demonstrate:

• The ability to make independent strategic decisions and maintain responsibility for core activities, with appropriate oversight of material risks including outsourced services.
• Sufficient financial and operational capacity to deliver strategy sustainably and in a customer-centric manner, whilst complying with Irish regulatory and legislative obligations.
• Effective internal governance arrangements, control mechanisms, and administrative policies designed to enable effective operation, manage risks, and protect customer interests.
• Effective board oversight to identify, challenge, and constrain excessive risk-taking, with implementation of appropriate risk mitigation measures.
• Sufficiently integrated governance arrangements and internal control functions with appropriate resources, stature, and expertise to respond to the range of risks facing the firm and safeguard customer interests.

Safeguarding a Key Supervisory Priority

According to the regulator: “The safeguarding of Users’ Funds is a key supervisory priority for the Central Bank and a fundamental requirement for all EMIs under the EMR 2011. Customers entrust their funds to EMIs with the expectation that those funds will be protected and readily available for redemption. If Users’ Funds are not adequately safeguarded there is potential for loss or detriment.”

The case underscores the regulatory risks facing crypto firms that rely on group-wide infrastructure while operating under local financial rules, particularly where customer money must be segregated and protected.

The enforcement action was reported by BitcoinKE.