Coinbase, a leading cryptocurrency exchange based in the United States, has just been fined 3.3 million euros ($3.6 million) by the Dutch central bank (DNB) for failing to obtain proper registration before providing crypto services in the Netherlands.
DNB stated that it has taken into account the fact that Coinbase is one of the largest companies dealing in cryptocurrencies and has a large number of customers in the northwestern European country.
The authorities confirmed that the exchange did not comply with the rules during the period from November 2020 to August 2022. In accordance with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act, businesses operating in the Netherlands or intending to offer related services are required to register with the DNB first.
On May 21, 2020, the central bank made it a requirement for crypto exchanges and crypto service providers to register with government bodies in order to comply with the requirement. This is necessary because of the increased threat of money laundering and terrorist financing associated with crypto services — because of the secrecy that comes with it.
Coinbase has enjoyed a competitive advantage because it does not pay any supervisory fees to DNB or incur other costs related to DNB's supervisory activities.
In addition, the central bank revealed that the exchange had previously violated the directive's objectives by operating in the Netherlands and providing cryptocurrency services without first registering with the DNB. On this basis, Coinbase was unable to report suspicious transactions to the country's Financial Intelligence Unit during its non-compliance period and will not be able to do so until September 22, 2022.
Coinbase now has until March 2 to submit an appeal to the Dutch central bank about the proposed penalty. It is expected that the Coinbase (COIN) stock price will react to this news once the U.S. market. open for trading on Thursday.