The Dutch central bank fined cryptocurrency exchange Coinbase for providing services in the past without the necessary registration. The trading platform, which has until March to object to the move, is currently considering an appeal against the move.
Dutch Monetary Authority fines Coinbase for operating without registration
The Dutch Bank (DNB) imposed an administrative fine of €3,325,000 (over $3.6 million) on Coinbase Europe Limited, on January 18, 2023. An announcement explained the penalty with the exchange offering crypto services in the Netherlands in a period above without registering with the central bank.
That, according to the regulator, constitutes a breach of Dutch rules, as companies that want to provide cryptocurrency-related services are required to register with the DNB under the country’s Anti-Money Laundering and Terrorist Financing Act.
The monetary authority also detailed that the base amount for this category of fines is 2 million euros and noted that the fine in the case of Coinbase has increased “due to the seriousness and degree of culpability of the breach.”
“In increasing the fine, DNB took into account the fact that Coinbase is one of the largest crypto service providers in the world. Additionally, Coinbase has a significant number of clients in the Netherlands who use its crypto services,” the bank said, noting that the exchange has not paid any monitoring fees.
The Dutch central bank also noted that Coinbase operated without registration for an extended period, between mid-November 2020 and the end of August 2022, stressing that it views this as a serious breach.
However, the DNB also reduced the fine by 5%, as it said that Coinbase had always intended to obtain registration in the Netherlands, which it did on September 22 of last year. The registration requirement for crypto service providers was introduced in May 2020.
The lack of registration meant that the global exchange was unable to report unusual transactions to the Dutch Financial Intelligence Unit during the said period and these transfers may have gone undetected by investigating authorities, the bank insisted.
Coinbase will be able to challenge the fine until March 2, 2023. Reuters quoted the exchange as saying it disagreed with the DNB’s decision, which it said “does not include criticism of our actual services.” The cryptocurrency company is now considering an appeal.
In July 2022, De Nederlandsche Bank imposed an identical measure against Binance. The world’s largest cryptocurrency exchange was also fined the same amount in euros for offering cryptocurrency services in the Netherlands without the required registration.
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