American crypto exchange Coinbase plans to protest a weighty fine imposed by the Dutch central bank over “non-compliance” violations.
Coinbase (NASDAQ: COIN) has received a $3.6 million fine from the Dutch central bank for offering unregistered crypto services to customers in the country. According to the Dutch apex bank, Coinbase’s Europe arm provided the crypto services without the legally required registration until late September 2022. The governing bank cited Dutch law, which requires that crypto providers register under anti-money laundering and terrorist financing norms.
The De Nederlandsche Bank (DNB) described the Coinbase fine as administrative and said it increased the base amount due to severity. In addition, the Dutch central bank said that Coinbase’s “degree of culpability of the non-compliance” warranted an increased fine. The DNB said it considered the crypto exchange’s Dutch customer base and competitive advantage gained from not paying supervisory fees. Lastly, the apex bank thought Coinbase’s non-compliance to be very severe because it persisted over a prolonged period – approximately two years.
Coinbase Objects to DNB Dutch Fine
However, Coinbase, which eventually obtained its registration on September 22nd, 2022, disagrees with the DNB’s enforcement order. The leading American crypto exchange also intimated that it is “carefully considering the objections and appeals process.” As it stands, Coinbase has until March 2nd to object to the DNB’s administrative fine. A company spokesperson pointed out Coinbase’s commitment to abiding by jurisdictive rules. The spokesperson said:
“Coinbase is committed to compliance in all jurisdictions in which it operates and will continue to provide safe, trusted services to new and existing Dutch customers.”
The spokesperson also added, “We should not be penalized for playing by the rules and engaging in this process.” According to the Coinbase media representative, the order “is based on the time it took for Coinbase to obtain our registration in the Netherlands.” Therefore, this order does not include any criticism of the exchange’s actual services.
Although the DNB’s fine on Coinbase remains relatively weighty, the Dutch apex bank did remove 5% from the original amount. The reported reason for the marginal reduction is that Coinbase had always intended to obtain registration with the Dutch governing bank.
Coinbase allegedly operated while unregistered between November 15th, 2020, and August 24th, 2022.
Binance 2022 “Non-Compliance” Fine
Last summer, the Dutch apex bank also imposed a similar fine on Binance for offering unregistered services in the Netherlands. The DNB demanded that the world’s largest crypto exchange pay a $3.35 million penalty for the “serious violations.” According to the Dutch regulator, Binance violated its registration rules from May 21st, 2020, until at least December 1st, 2021.
Binance’s fine development with the DNB last year came the following month after the exchange secured licensing with France and Italy. The European powerhouse nations licensed the Changpeng Zhao-led organization as an official digital asset provider.
At the time, Zhao lauded the development and described France’s attitude toward the crypto industry as “phenomenal.”
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
