Coinbase fined $3.6 million in the Netherlands
The Dutch Central Bank has fined Coinbase €3.3 million ($3.6 million) as the crypto exchange was providing its services in the Netherlands without the required registration. Coinbase has until 2 March 2023 to object to the penalty.
Per the statement, Coinbase 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 Coinbase’s large client base in the country, its huge trading turnover and “the severity and degree of culpability of the non-compliance” 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.
“Coinbase has enjoyed a competitive advantage in that it has not paid any supervisory fees to DNB or incurred other costs in connection with DNB’s regular supervision activities. A further important reason for the increased fine is that the non-compliance persisted over a prolonged period: from 15 November 2020 until at least 24 August 2022 (the end date of DNB’s examination). This is why DNB considers the non-compliance to be very severe,” the statement reads.
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.
A Coinbase spokesperson said in an emailed reaction that the exchange takes compliance very seriously and was then already in the process of submitting an application for the required registration. However, the company disagreed with the DNB’s decision and was considering an appeal. He added that the action was “based on the time it took for Coinbase to obtain our registration in the Netherlands and includes no criticism of our actual services.”
To encourage regulated business within the crypto industry, the country adopts 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.
The Dutch central bank hit big rival Binance with an identical fine in July 2022. The regulator also fired a warning shot across the bow of unlicensed platforms selling cryptocurrency to locals, charging them with breaching the country’s securities regulations.
