Coinbase Fined $3.6M in Netherlands Due to Lack of Registration

Cryptocurrency exchange, Coinbase has just been fined a massive $3.6 million by the Dutch central bank for failing to obtain the requisite registration in the Netherlands before offering its services.

According to reports, the Dutch central bank, De Nederlandsche Bank (DNB), slapped Coinbase with a hefty fine of around 3.3 million euros due to non-compliance with local regulations for financial service providers. As per the central bank companies that wish to provide crypto services in Netherlands are required to register with DNB under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act.

Dutch Central Bank Targets Coinbase

DNB noted that having a registration requirement mechanism in place, enables the bank to monitor the risk of illicit financial flows more effectively. The central bank stated it also took into consideration the size of Coinbase as a company and the fact that it has a “significant number of customers in the Netherlands.” The bank further explained the base amount in this fine category is 2 million Euros, with a minimum amount of 0 Euros and a maximum amount of 4 million Euros.

However in case of Coinbase the base amount has been increased due to the severity and degree of culpability of the non-compliance. The Dutch central financial authority specified Coinbase was out of compliance between November 2020 and “at least” August 2022, before it successfully registered on September 22, 2022. DNB has given the crypto exchange until 2 March 2023 to object to the fine.

Coinbase Fined $3.6M in Netherlands Due to Lack of Registration

Furthermore, the Dutch central bank revealed that Coinbase contravened the objectives of the guidelines in the past by providing crypto services in the Netherlands without registration with DNB. Hence, a large number of unusual transactions may have gone unnoticed by the investigative authorities during this period. DNB explained,

“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.”

DNB’s Tryst with Crypto Companies

This is not the first time the Dutch central bank has intervened into the crypto space. In December 2022, DNB attacked cryptocurrency exchange KuCoin citing the company was operating in Netherlands without a license which is in violation of the law on preventing money laundering and financing terrorism.

In August 2021, the DNB issued a similar warning that Binance Holdings Ltd. was operating in the Netherlands without a license for which the exchange coughed up more than 3 million euros in fines.