The cryptocurrency exchange Coinbase has been fined $3.6 million by the Dutch Central Bank. The platform is accused of having implemented its activities in the Netherlands without having prior registration under the anti-money laundering and anti-terrorist financing standards. Coinbase has challenged this decision and announced to appeal.
3.6 million in fines for Coinbase in the Netherlands
The troubles of all kinds that Coinbase is enduring are far from over. The cryptocurrency exchange could very soon be asked to pay an exorbitant fine in the Netherlands for administrative complacency. Indeed, the Dutch central bank has announced that it has imposed an administrative fine of $3.6 million on Coinbase.
The Coinbase platform is accused of having provided its crypto services in the country without having acquired the required legal registration. Indeed, Coinbase obtained its registration on September 22, 2022, while the platform had been operating in the Netherlands since November 15, 2020. During this period, Coinbase failed to report potentially dangerous transactions to the Dutch Financial Intelligence Unit due to lack of registration.
The Dutch central bank imposed an administrative fine of €3,325,000 on Coinbase. The fine was imposed because Coinbase has provided crypto services in the Netherlands in the past without registration, which is not in compliance with the law.DNB
In the Netherlands, the rules put in place on May 21, 2020 to combat money laundering and terrorist financing are clear on this subject, though. Any provider of crypto services must first obtain a registration with the Dutch central bank before operating in the Netherlands. According to the Dutch legislator, this registration requirement allows the central bank to more effectively monitor the risk of illicit financial flows.
Aggravating circumstances against Coinbase
According to Dutch law, failure to register is punishable by a basic fine of $2 million. Therefore, it can be seen that the amount of the fine imposed on Coinbase is higher than the legal requirements. This is due to the seriousness and the degree of guilt of Coinbase, justifies the Dutch central bank.
Indeed, Coinbase has a large number of customers in the Netherlands. By not paying the fees related to the registration to the surveillance, the platform has thus benefited from an important competitive advantage. In addition, Coinbase’s non-compliance has persisted for quite some time. While Coinbase has been operating in the Netherlands since November 15, 2020, the platform obtained registration on September 22, 2022.
Coinbase challenges the decision of the Dutch central bank
Like any judicial or administrative decision, the fine imposed on Coinbase can be challenged. Thus, the Coinbase platform has until March 2, 2023 to appeal this decision.
As expected, the Coinbase platform has challenged this decision. It has announced at the same time that it will appeal to change this decision. The exchange did not reveal in detail why it opposes the decision. Coinbase just said that the decision of the Dutch central bank “does not include any criticism of our actual services” reports Reuters.
Coinbase is not the only cryptocurrency exchange in trouble due to the registration failure. Its larger competitor Binance is facing legal action in France for offering its services in that country before registration was obtained. We hope Coinbase’s appeal can change the decision. The platform is already facing significant economic difficulties. It even came to the point of downsizing and closing its operations in Japan. An exorbitant fine would be a huge blow to a crypto player like Coinbase that is already struggling.
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