The Dutch central bank imposed a fine of €3.3 million on the US-based leading crypto exchange Coinbase. As per a report, the De Nederlandsche Bank (DNB) announced that Coinbase did not follow a certain registration process before offering services in the nation.
As per the Dutch Anti-Money Laundering and Anti-Terrorist Financing act, the crypto firms who want to provide their services in the Netherlands must register with DNB. After assessing the risk of money laundering and terrorist financing in the crypto market, DNB introduced registration requirements for crypto firms on 21 May 2020.
The crypto firms who didn’t follow the registration procedure had to pay the base amount of €2 million. But in the case of Coinbase, the fine was increased due to the “severity and degree of culpability of the non-compliance.”
DNB highlighted in its report that Coinbase operated its network in the country without registration from November 15 2020 to 24 August 2022 so DNB considered non-compliance to be high for Coinbase.
However, the Dutch central bank decided to reduce the fine by 5% as Coinbase always intended to obtain nationwide registration, which it did on 22 September 2022.
It is not the first time that DNB imposed fines on crypto firms. In July 2022, DNB fined 3.3 million euros on Binance, another crypto exchange, for offering crypto services in the Netherlands without registration.
Germany-based Coinbase faced difficulties with BaFin in November 2022
BaFin, the Federal Financial Supervisory Authority of Germany, alleged that Coinbase was violating its business rules related to the crypto market. It advised Coinbase to adhere to certain regulations because it has crypto markets in the nation.
BaFin warned Coinbase for not following the country’s business requirements. BaFin was established to promote financial stability and transparency in the country. It acts as the head of the financial services regulations in Germany. BaFin maintains the country’s economic stability through banks, credit institutions, insurance companies, and stock exchanges.
How Coinbase protects customers from bad players
To protect users, Coinbase utilizes a variety of proprietary and blockchain-based compliance tools, including Coinbase Tracer, the Customer Risk Scoring system and the Travel Rule Universal Solution Technology consortium (TRUST).
Coinbase Tracer helps to investigate “illicit activities, screen risky transactions, monitor risk, trace the flow of funds, and analyze blockchain data.” The Customer Risk Scoring system helps to identify high-risk characteristics.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/28/dutch-central-bank-fines-coinbase-e3-3-million/