Coinbase Faces $3.6M Dutch Fine for Providing Unregistered Crypto Services

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US crypto exchange Coinbase plans to protest against a heavy fine imposed by the Dutch central bank for “non-compliance” violations.

Coinbase (NASDAQ: COIN) has been fined $3.6 million by the Dutch central bank for offering unregistered crypto services to customers in the country. According to the Dutch apex bank, the European arm of Coinbase provided the crypto services without the legally required registration until the end of September 2022. The governing bank cited Dutch law, which requires crypto providers to register in accordance anti-money laundering and anti-terrorist financing standards.

De Nederlandsche Bank (DNB) called Coinbase’s fine administrative and said it had increased the base amount due to its severity. Additionally, the Dutch central bank said Coinbase’s “degree of non-compliance culpability” warranted an increased fine. DNB said it considers the Dutch customer base of the crypto exchange and the competitive advantage gained by not paying monitoring fees. Finally, the apex bank deemed Coinbase’s non-compliance to be very serious as it persisted over an extended period of approximately two years.

Coinbase Items at DNB Dutch Fine

However, Coinbase, which finally obtained registration on September 22, 2022, disagrees with the DNB enforcement order. The leading US crypto exchange also hinted that it is “carefully reviewing the objection and appeals process.” As it stands, Coinbase has until March 2 to object to the DNB administrative fine. A spokesperson for the company highlighted Coinbase’s commitment to respecting jurisdictional rules. The spokesperson said:

“Coinbase is committed to compliance in all jurisdictions in which it operates and will continue to provide secure and reliable services to new and existing Dutch customers.”

The spokesperson also added, “We should not be penalized for following the rules and engaging in this process.” According to Coinbase’s media representative, the order “is based on how long it took Coinbase to get our registration in the Netherlands.” Therefore, this order does not include any criticism of the actual services of the exchange.

Although the DNB fine on Coinbase remains relatively heavy, the Dutch apex bank withdrew 5% of 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 would have operated without being registered between November 15, 2020 and August 24, 2022.

Binance 2022 fine for “non-compliance”

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 fine of $3.35 million for “serious violations”. According to the Dutch regulator, Binance violated its registration rules from May 21, 2020 until at least December 1, 2021.

Binance’s nice development with DNB last year came the following month after trading secure licenses with France and Italy. European powers have authorized the organization led by Changpeng Zhao as an official digital asset provider.

At the time, Zhao praised the development and called France’s attitude towards the crypto industry “phenomenal”.

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Tolu is a Lagos-based cryptocurrency and blockchain enthusiast. He likes to demystify crypto stories to the essentials so that anyone, anywhere can understand without too much background knowledge. When not immersed in crypto stories, Tolu loves music, likes to sing, and is a movie buff.

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