The Dutch Central Bank has imposed an administrative fine of approximately 3.3 million euros on major crypto exchange Coinbase. The reason behind the fine is the crypto services provided by the exchange in the Netherlands without registration in the past. The central bank has given Coinbase until March 2 to contest the fine.
The fine was imposed on 18 January.
On its website, the central bank said, “On 18 January 2023, De Nederlandse Bank (DNB) imposed an administrative fine of €3,325,000 on Coinbase Europe Limited (coinbase, The fine was imposed because Coinbase had in the past provided crypto services in the Netherlands without registering with the DNB, which is not complying with the law.”
In the Netherlands, companies that want to provide crypto The services are required to be registered with DNB under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act.
The central bank introduced the registration requirement for crypto exchanges and other crypto service providers on May 21, 2020, due to the high risk of money laundering and terrorist financing associated with crypto services. Specifically, it pertains to the anonymity associated with crypto transactions.
Having a registration requirement mechanism allows DNB to monitor the risk of illicit financial flows more effectively.
According to the central bank, non-compliance of Coinbase’s guidelines could result in a Category 3 fine.
In its statement, the central bank clarified that the base amount in this fine category is €2 million, with a minimum amount of €0 and a maximum amount of €4 million. “The base amount has been increased depending on the seriousness of the non-compliance and the degree of culpability,” it added.
While increasing the fine amount, DNB also took into account the fact that Coinbase is one of the largest crypto service providers globally. Furthermore, Coinbase has a large number of customers in the Netherlands who use its crypto services.
Additionally, it said, “Coinbase enjoys the competitive advantage that it has not paid any supervisory fees to DNB or other costs in connection with DNB’s routine supervisory activities.”
Another reason for increasing the penalty amount is non-compliance for a longer period of time from 15th November 2020 till at least 24th August 2022 which is also the last date of DNB exams.
Furthermore, the Dutch Central Bank revealed that Coinbase had in the past violated the objectives of the guidelines by providing crypto services in the Netherlands without registering with the DNB. This meant that Coinbase was unable to report unusual transactions to the Financial Intelligence Unit – The Netherlands during the non-compliance period and until 22 September 2022. As a result, a large number of unusual transactions may have gone unnoticed by the investigating officers during this period. period.”
“It is for this reason that the DNB regards the non-compliance very seriously,” the central bank said.
Nevertheless, DNB reduced the fine to 5% as the crypto exchange intended to obtain registration with DNB.
The crypto exchange obtained its registration on 22nd September 2022.
The central bank has given Coinbase until March 2, 2023, to object to the fine.
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