Coinbase clears Irish anti-money laundering hurdle

The Central Bank of Ireland has authorised Coinbase to operate as a virtual asset service provider (VASP), bringing the US-listed crypto exchange under its supervision for the purposes of anti-money laundering and criminal financing regulations.

The authorisation makes Coinbase the second crypto exchange to receive authorisation in the Republic after Gemini was granted VASP approval in July. Zodia Custody Ireland, a cryptoasset servicing company focused on institutional investors, also received approval earlier this year.

It means that the regulator is satisfied that Coinbase can meets its anti-money laundering and criminal financing obligations under Irish and European law and allows the company to provide it services to Irish consumers and businesses.

Cryptoassets and exchanges are not currently regulated in the State. VASP registration means Coinbase now falls under the Central Bank’s supervision for anti-money laundering and criminal financing regulatory purposes only.

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CEO of An Post David McRedmond joins Ciaran Hancock to discuss the ongoing row between An Post and the UK’s Post Office over the implementation of post-Brexit customs rules, which is resulting in thousands of online purchases being returned to British retailers. Later on, we hear from two Dublin city centre business owners, Stephen Kennedy of Copper+Straw cafe and Sean Crescenzi of Happy Endings restaurant. They speak about the impact that anti-social behaviour and drug dealing, in and around Aston Quay, is having on their businesses and the immediate and long-term solutions they would like to see implemented to address the issue.

Founded in the US in 2012, Coinbase allows users to buy and sell crypto assets such as bitcoin and ethereum. It received an e-money licence from the Central Bank in 2019, entitling it to provide electronic payment services and handle electronic payments for third parties.

In a blog post on Wednesday, the company said VASP registration means it is now subject to the Criminal Justice Money Laundering and Terrorist Financing Act 2010, “demonstrating our commitment to the highest standards of compliance”.

“The VASP registration covers two Coinbase entities,” it said, “Coinbase Europe Limited, and Coinbase Custody International Limited, both of which are based in Ireland. Coinbase Europe provides crypto-trading services to customers in Europe, and Coinbase Custody International provides crypto custody services to institutional customers across Europe.”

“Ireland has been a natural home for Coinbase in Europe, not least because of its talent pool and openness to industry, but also because of its EU membership and access,” Nana Murugesan, vice-president of international and business development at Coinbase, said on Wednesday. “Our Irish regulatory approval demonstrates our commitment and collaboration with the Central Bank of Ireland.”

Separately, the company has announced that former Deloitte Ireland director Cormac Dinan has joined Coinbase as its Irish lead.

“As the most trusted and secure crypto exchange, Coinbase has developed its technology and regulatory procedures alongside the industry as it matures,” he said in a statement. “I’m looking forward to strengthening Ireland’s operations and helping the sector’s continued growth. Creating an environment which champions innovation while strengthening trust in crypto is something I am really eager to progress.”

After-tax profits at the Irish arm of cryptoasset exchange Coinbase jumped more than 300 per cent to €2.7 million in 2021 before the crypto downturn set in earlier this year, sending the company’s share price tumbling more than 80 per cent so far.

Recently filed accounts for Coinbase Ireland show it employed an average of 117 people at its offices in Dublin in 2021, up from 58 in 2020. However, the company has made about 18 per cent of its global workforce redundant in the second half of the year in an attempt to cut costs amid the broader downturn, with a number of Irish jobs affected.