Bernstein Declares Prediction Markets a New Mainstream Asset Class

Bernstein labels prediction markets a mainstream asset. Strong capital, users, and better regulation drive this shift.

Bernstein now sees prediction markets entering mainstream finance. The Agreement is with the Central Bank of Ireland (CBI) after non-compliance with technical aspects. According to Bloomberg, Coinbase needs to pay a fine of a total of €21.5 million, which is roughly $24.7 million. This fine is for the violation of AML (anti-money laundering) requirements in 2021 and 2022.

The exchange had acknowledged to its internal transaction monitoring software that three coding errors existed. As a result, five of its twenty-one monitoring scenarios only partially screen a few transactions for suspicious activity. Thus, over 30 million transactions went unnoticed for an entire year. The value of these non-monitored transactions was more than EUR176 billion.

System Faults Lead to Massive Transaction Monitoring Failure

Coinbase Europe Limited admitted that it failed in meeting its crucial transaction monitoring requirements. Also, it acknowledged that it did not have sufficient internal policies and controls in place. These controls are needed in order to effectively prevent and detect terrorist financing and money laundering. The company also acknowledged that it should have performed more scrutiny on an additional 184,790 transactions.

The initial total sanction determined by the Central Bank was more than EUR30.6 million. However, the CBI used the discount of thirty percent on the basis of settlement scheme. The Agreement was concluded yesterday, November 5, 2025. Coinbase Europe had accepted the reprimand and financial fine. The sanctions are still up for final confirmation by the High Court.

Central Bank Deputy Governor, Colm Kincaid, said the failure was serious. As he observed that the enforcement agencies are very dependent on regulated financial institutions for their surveillance and reporting of suspicious activities. He said the failure of such a system makes an obvious avenue for criminals.

Crypto assets create special challenges given their technological characteristics. Their borders-skipping and anonymizing capabilities make them particularly appealing to criminals. Therefore, it is vitally important that service providers of crypto services implement effective controls at the earliest. These systems need to be able to identify and report all suspicious transactions to regulators.

Coinbase Files Late Reports, Strengthens Compliance Systems

The following audit of the non-audited transactions was a huge task. It took Coinbase Europe nearly three years to fully monitor all transactions that were affected. As a result of this review, the firm filed more than 2,700 suspicious transaction reports (STRs) with the authorities. These late reports identified possible criminal activity for further investigation.

The STRs had suspicions of serious criminal activities. These ranged from potential money laundering, fraud and scam attempts, and cyber-attacks. There were also suspicions for drug trafficking and child sexual exploitation material.

Coinbase publicly confirmed that it was able to spot the problem while testing internally. It corrected the coding errors in a couple of weeks after it was found out. Since then, the company has completely upgraded its testing protocols. It has also strengthened the management of its Transaction Monitoring System to avoid future mistakes. Coinbase understands the critical importance of successful AML processes around the world.