Dutch Central Bank Hits Coinbase with €3.3 Million Fine, TMT Director Comments on Penalty

The DNB considers the non-compliance to be very severe.

The Dutch Central Bank (De Nederlandsche Bank or DNB) has fined Coinbase Europe Limited €3,325,000. The administrative penalty was assessed as Coinbase (NASDAQ:COIN) had been providing digital asset services in the Netherlands without registration and thus not in compliance with existing law.

In the Netherlands, platforms interested in providing crypto services must register with DNB under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft). The registration requirement for crypto firms was introduced in May 21, 2020 – so Coinbase has apparently been a scofflaw for quite some time.

Coinbase’s non-compliance is subject to a base amount in this category is €2 million, with a minimum amount of €0 and a maximum amount of €4 million. DNB said the base amount has been increased “due to the severity and degree of culpability of the non-compliance.”

In increasing the fine, DNB said that it took into account the fact that Coinbase is one of the largest crypto service providers globally. Moreover, Coinbase has a significant number of customers in the Netherlands that make use of its crypto services.

At the same time, DNB said that Coinbase has “enjoyed a competitive advantage in that it has not paid any supervisory fees to DNB or incurred other costs in connection with DNB’s regular supervision activities.”

Following the transgression of the law, Coinbase obtained its registration on September 22, 2022.

CI received a comment on the penalty from Fergal Parkinson, Director of TMT Analysis. Parkinson stated:

“Another crypto giant being hit with fines from regulators won’t help the market’s ‘wild west’ reputation. Concerns over regulation and security appear to be the major factors preventing potential investors from fully embracing crypto – changing consumer perceptions is the single biggest barrier to crypto mass adoption. In addition to obtaining the correct registration, exchanges and providers need to ensure that they implement more stringent security and anti-fraud processes in order to attract investors and allow crypto to fulfil its potential as a truly viable, global alternative to the current monetary system. This is vital to give people the confidence to make an investment and continue to grow the market. Measures such as number verification are a simple yet vital step in fighting fraud and boosting consumer confidence in the market.”

Coinbase has endured a difficult period as crypto contagion, and a crypto ice-age, have impacted all digital asset firms.

Since the beginning of 2023, Coinbase has been hit with a penalty issued by the New York State Department of Financial Services (NYDFS) for $50 million, halted operations in Japan, and announcing another round of layoffs impacting around 950 employees while predicting a $500 million loss for fiscal year 2022.

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