Irish regulator fines Coinbase Europe 21.5 million euros over monitoring failures

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2,700 suspicious transactions identified due to fault, central bank says

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Over 30 million transactions not properly monitored, it says

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Coinbase says errors quickly fixed, systems enhanced

(Adds detail, quotes throughout, Coinbase statement)

DUBLIN, Nov 6 (Reuters) - Ireland's central bank fined an Irish subsidiary of cryptocurrency exchange Coinbase Global (COIN) 21.5 million euros ($25 million) on Thursday for breaching anti-money laundering and counter-terrorist transaction monitoring obligations.

The Irish regulator said the fine related to faults in the configuration of Coinbase Europe's transaction monitoring system, which resulted in more than 30 million transactions worth over 176 billion euros not being properly monitored over a 12-month period.

It added that it took Coinbase almost three years to fully complete the monitoring of the affected transactions, leading to the reporting of 2,708 suspicious transactions to the authorities for further analysis and potential investigation.

The transactions contained suspicions associated with serious criminal activities including money laundering, fraud, drug trafficking, cyber attacks and child sexual exploitation, the central bank said.

COINBASE SAYS IT INADVERTENTLY MADE CODING ERRORS

Coinbase Europe provides crypto asset and wallet services to customers globally to facilitate their use of the Coinbase Group's trading platform to buy and sell crypto assets, the central bank said.

Coinbase said in a statement that it inadvertently made three coding errors in its transaction monitoring system that caused five of the 21 scenarios which look for certain red flags to not fully screen all transactions in 2021 and 2022.

It said it fixed the coding errors within two to three weeks of detecting them. As part of the settlement, Coinbase and the central bank cannot say that the suspicious transactions cumulatively valued at 13 million euros actually resulted in criminal activity, it said.

Coinbase added that it has taken steps to prevent the types of errors from happening again, including enhancing its testing and monitoring.

The fine was reduced from 30.7 million euros by way of a settlement discount and based on Coinbase Europe's average annual revenue of 417 million euros for the period.

"The failure of such a system within any financial institution creates an opportunity for criminals to evade detection - and criminals will take that opportunity," Irish Central Bank Deputy Governor Colm Kincaid said in a statement.

"Crypto has particular technological features which, together with its anonymity-enhancing capabilities and cross-border nature, makes it especially attractive to criminals looking to move their funds." ($1 = 0.8575 euros) (Reporting by Muvija M; Editing by Padraic Halpin and Emelia Sithole-Matarise)