On January 26, the Dutch financial regulator, De Nederlandsche Bank (DNB), imposed a fine of €3.1 million ($3.6 million) on Coinbase crypto exchange for failing to register their services in the Netherlands.
Coinbase Receives $3.6 Million Fine
The DNB has penalized Coinbase crypto exchange with a fine of $3.6 million. The Dutch Authority accused Coinbase of offering its services without authorization in the Netherlands for a long time. According to the Authorities, this violates the Dutch Financial Supervision Act.
Despite being warned earlier, Coinbase ignored the warnings and continued to offer its services to Dutch customers. However, Coinbase has stated that they are making plans to take all necessary measures to comply with Dutch regulations. They are currently working with the DNB to clarify their compliance obligations.
The DNB has emphasized that the Netherlands plays an important role in the digital asset market and that the regulatory authorities must work to foster a healthy digital asset ecosystem.
Coinbase in Hot Water With Regulators
Coinbase, the leading cryptocurrency exchange, has been in trouble with regulators several times. In 2018, the U.S. Commodity Futures Trading Commission (CFTC) fined the company for failing to register as a futures commission merchant.
A year later, the U.K.’s Financial Conduct Authority (FCA) also fined coinbase $2.3 million for failing to implement anti-money laundering measures.
The fines on Coinbase show that it needs to take regulatory compliance seriously. If the issues raised by regulators are not resolved quickly, Coinbase could face further penalties, such as criminal charges or a permanent shutdown. To avoid such serious consequences, Coinbase should address the identified issues as soon as possible.
Is this Deliberate?
This incident follows a similar one on Binance in July 2022, resulting in a €3.3 million penalty. DNB accused Binance of exploiting its competitive advantage to offer local investors access to cryptocurrency services without proper regulation. The Dutch regulator can impose fines of up to €4.4 million on a crypto exchange.
Moreover, exchanges that do not comply with applicable laws and regulations may find themselves in serious legal trouble, including criminal charges.