The Dutch National Bank has charged Coinbase $3.6 million for failing to comply with registration requirements before providing services in the Netherlands.
The cryptocurrency exchange has an expansive foothold in the various regions where it offers its services. However, a recent report shows that Coinbase failed to meet required obligations before offering its services to users in the European nation.
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The Dutch central bank explained that Coinbase operated without a license from November 15, 2020 to August 24, 2022. Therefore, it has been fined by the Dutch central bank. On September 22, 2022, Coinbase finally received the proper registration; however, the DNB claimed that during that time, the company had gained a competitive advantage by not paying supervision costs.
One of the requirements set by the Dutch Central Bank is that cryptocurrency companies wishing to offer their services in the Netherlands must register with the DNB under the Anti-Money Laundering and Terrorist Financing Act.
In an interview with Decrypt, a Coinbase spokesperson informed the company that it did not comply with the DNB fine, stating that it was “based on the time it took for Coinbase to obtain our registration in the Netherlands and does not include criticism of our actual services.” adding that exchange “You should not be penalized for following the rules and participating in this process.”
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The penalty was increased from a base amount of $2.18 million due to the severity of the breach, De Nederlandsche Bank (DNB) said in a statement. Furthermore, the report states that the fine is higher due to Coinbase’s size as one of the most popular crypto exchanges in the world and the number of clients it boasts of in the Netherlands. According to CoinGecko, Coinbase has hosted over $2.3 billion in volume over the past day.
The fine was later reduced by 5% to reflect the fact that the company had always intended to finalize the registration. Now, the cryptocurrency exchange has until March 2 to contest the fine.
The spokeswoman stated: “While we recognize DNB’s right to enforce its rules, we are carefully reviewing the complaints and appeals process.” Binance received a similar sanction from the Dutch authority last summer for providing its services without a license. Coinbase (COIN) stock price is $52.76, down 1.48%.
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Coinbase Breach and Recent Effort by Regulators to Protect Users
Many cases like this will arise in the future, and there will be countless reasons to reference FTX’s devastating collapse in 2022. The boomerang from the crash has prompted regulators to enact and enforce regulations that protect users from losses that could have been avoided. with the necessary measures. Coinbase is the latest company to be fined by these regulators.
To remain operational in different regions, crypto companies must fully recognize and comply with current regulations. They present their utilities in this way as transparent and neutral, with no underlying flaws or schemes to defraud users.
This week, the South African Advertising Regulation Board announced that potential risks and benefits must be stated in the ads that cryptocurrency companies will run. There are more regulations, and cryptocurrency companies will have no choice but to comply with these regulations to stay operational and active.