Binance exits Netherlands, users given withdrawal deadline

Citing the inability to obtain registration as a virtual asset service provider (VASP) with the Dutch regulator, Binance stated on Friday that it would no longer be able to serve clients from the country.

Existing Dutch customers will have a limited timeframe to withdraw their assets from the platform, beginning on July 17. Binance urged its local users to take prompt action to ensure a smooth transition by adhering to the provided withdrawal timeline.

“Binance has been in a comprehensive registration application process as a virtual asset service provider (VASP) with the Dutch regulator. Although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately, this has not resulted in a VASP registration in the Netherlands at this time,” Binance’s official statement reads.

The development comes nearly a year after Dutch Central Bank fined Binance €3.3 million as the crypto exchange was providing its services in the Netherlands without the required registration.

Binance was originally hit by an administrative fine of a €2 million base amount. However, the DNB said the penalty was increased as the exchange benefited from lower costs because it hadn’t paid registration fees and other regulatory charges, unlike its competitors.

The Dutch central bank also cited Binance’s large client base in the country and its huge trading turnover as additional reasons to hike its fine. Overall, the cryptocurrency exchange was not in compliance with anti-money laundering or anti-terrorism financing legislation in the Netherlands.

To encourage regulated business within the crypto industry, the country adopted a licensing scheme for digital assets services after the amendment it introduced two years ago to the EU’s Money Laundering Directive. The Dutch government also introduced a raft of new regulations, including tougher KYC rules for digital currency transactions. The authorities want to prevent anonymity in cryptocurrency transactions thereby placing a ban on anonymous crypto accounts.

Coinbase was also fined €3.3 million ($3.6 million) in May. However, the central bank reduced the fine by 5% because Coinbase “had always intended to obtain registration” with DNB. Coinbase obtained its country approval on 22 September 2022.

At the time, Coinbase disagreed with the DNB’s decision and added that the action was “based on the time it took for the exchange to obtain our registration in the Netherlands and includes no criticism of our actual services.”