The Central Bank of Ireland has fined Coinbase Ireland Limited €3.25 million ($3.65 million) for failing to safeguard customer funds and for leaning on its US parent to run compliance functions it was supposed to control itself.
The regulator announced the penalty on Thursday, one day after it reached a settlement with the Coinbase subsidiary.
The breaches ran from November 2020 to August 2025 under Ireland’s Electronic Money Regulations. Coinbase Ireland, an e-money institution, issues the euro and dollar balances European customers use to buy bitcoin and other crypto assets on the Coinbase platform.
The law requires those balances to sit in dedicated safeguarding accounts, walled off from corporate money and from customers of other Coinbase entities.
Coinbase’s three failures
The Central Bank found three failures. Coinbase Ireland placed “excessive reliance” on its US-based group to design and run its safeguarding controls, and it lacked the local expertise to oversee that work.
Its safeguarding account was underfunded “for lengthy periods of time” because of poor system design and weak control testing. And it had no adequate process to flag material changes in its safeguarding practices to the regulator.
That last point drew the sharpest language from Karen O’Leary, the Central Bank’s director of enforcement. The regulator said the exchange Ireland promised “robust and automated safeguards” when it sought authorisation in 2019, and that the firm’s practices drifted from those commitments without notice.
“Failing to adhere to the assurances made during the authorisation process or to inform us of material changes as happened in this case is completely unacceptable,” O’Leary said. “Payment and e-money firms have a fundamental obligation to fully safeguard customers’ funds. The Central Bank has made its supervisory expectations in this regard clear: we have no tolerance for weaknesses in safeguarding arrangements.”
The Central Bank set the base penalty at €4.65 million and applied a 30% discount for settling. The fine and a reprimand await confirmation from Ireland’s High Court. It is the regulator’s 164th enforcement outcome, bringing its lifetime fines past €432 million.
Coinbase’s response
In a blog post, Coinbase said it self-reported “many of the items described in the settlement” in January 2024 and fixed most of the underlying control issues that same year. The company stressed that no customer lost money or lost access to funds.
Coinbase laid out five problem areas. During the March 2023 US banking crisis, as Silvergate Bank neared collapse, Coinbase Ireland directed 30 customers to deposit dollars into a Coinbase, Inc. account at another US bank, mixing their funds with those of a separate Coinbase entity.
After Brexit forced the migration of European customers from the company’s UK affiliate, some kept sending deposits to the old UK accounts. Euro withdrawals for US and UK customers of other Coinbase units were at times paid out of the Irish safeguarding account for liquidity reasons, the exchange said.
Coding errors in an internal dashboard left the safeguarding account underfunded by an average of roughly 0.54% of its total obligation through 2023 and the first half of 2024. And the firm did not tell the Central Bank about changes to its practices.
A daily “Treasury Rebalancing Process” moved funds back into the correct account each day, the exchange said, but that did not prevent the initial commingling.
“These issues largely arose in the context of Coinbase taking steps to protect customers during periods of significant disruption,” a company spokesperson toldReuters.
The exchange said it has since redesigned its safeguarding calculation, passed two third-party validations with no open findings, posted a €25 million guaranty bond and hired a dedicated head of safeguarding.
Second Irish fine in a year
The penalty follows a €21.5 million fine the Central Bank imposed on Coinbase Europe in November 2025 for failing to monitor more than 30 million transactions for money laundering and terrorist financing risk.
That unit’s Irish registration lapsed at the end of 2025 as the exchange shifted its European headquarters to Luxembourg under a MiCA license from the country’s financial regulator.
Coinbase is the largest US crypto exchange and the world’s biggest custodian of bitcoin, holding coins on behalf of most US spot bitcoin ETFs.
The European Banking Authority has designated USDC as the EU’s first significant e-money token under MiCA, setting up an additional layer of supervision for Circle’s euro-area issuing entity.
TL;DR: The classification was announced on October 14. From November 12, the EBA takes direct responsibility for specified prudential areas of USDC supervision, while French regulators retain other oversight functions.
Circle Internet Financial Europe SAS issues the token within the bloc. The EBA said 45 e-money tokens had been notified under MiCA and that USDC was the first to cross the threshold for significant classification. It is a milestone in the operation of Europe’s crypto rulebook rather than a new stablecoin launch.
The supervisory division is more nuanced than one agency taking over everything. The EBA will assume responsibilities covering own funds, reserves, liquidity and recovery or redemption planning. France’s ACPR will continue overseeing matters including governance, outsourcing and the suitability of key personnel.
That matters because stablecoin risk is not confined to whether a dollar token tracks its peg on a quiet trading day. Redemption pressure, the liquidity of backing assets and operational failures can become important when demand for withdrawals surges. Significant-token designation puts extra scrutiny on those areas.
For European banks and payment companies evaluating USDC, a clearer line of supervision may help with due diligence. It does not remove market, custody or operational risk, and it should not be taken as a guarantee of redemption under every conceivable scenario. MiCA is meant to establish a framework for managing such risks, not make them disappear.
Written by the News Desk and edited by Samuel Rae.
TL;DR: French lawmakers approved an amendment to the 2027 budget by 38 votes to 37 that would change how gains are taxed when cryptocurrencies are converted into stablecoins. The proposal is not yet final law.
For French crypto investors, moving from Bitcoin into a stablecoin could become a taxable event before any euros reach a bank account.
The National Assembly has narrowly adopted an amendment to the 2027 budget that seeks to remove the existing tax deferral on crypto-to-stablecoin conversions. The vote was 38 in favor and 37 against, with 25 abstentions. Nicolas Sansu, who introduced Amendment No. 3898, argued that switching from a volatile cryptoasset into a fiat-linked stablecoin should not receive different treatment from cashing out into ordinary currency.
The distinction has mattered to active traders. Under the existing framework described in the parliamentary debate, an exchange of one cryptoasset for another generally does not immediately crystallize the same capital-gains liability as conversion into fiat or spending proceeds on goods.
Stablecoins complicate that framework because they are themselves cryptoassets but are designed to track the value of currencies such as the euro or dollar. The proposal would narrow the tax advantage of using them as a temporary place to park gains.
There is a substantial caveat: an adopted amendment is not the same thing as an enacted tax law. The budget process still has parliamentary stages to clear, and the eventual wording could change before the legislation takes effect.
For now, French holders have a policy proposal to watch, not an instruction to recalculate past tax returns. The vote shows how closely lawmakers are looking at the line between crypto trading and a taxable cash-out.
MiCA compliance requires crypto firms entering the EU to address authorization, governance, capital, client asset protection and ongoing reporting requirements.
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