Crypto exchange Coinbase has been stung with a $3.6 million penalty for trading in the Netherlands while unregistered.
The exchange, one of the world’s most popular, has been hit by a number of blows from regulators recently. The New York State Department of Financial Services recently imposed a $50 million fine on the firm for violating anti-money laundering laws.
The fresh complaint came from the Dutch central bank, De Nederlandsche Bank (DNB), which had charged Coinbase with failing to comply with the country’s Anti-Money Laundering (AML) and Anti-Terrorist Financing Acts.
Dutch Central Bank Levies $3.6 million Fine
The DNB said in an announcement that all companies providing crypto-related services in the Netherlands must register or face penalties.
The central bank introduced the rule in May 2020 to clamp down on the increasing risk of terrorism being financed with crypto.
The bank claimed that Coinbase continued to trade in the country for nearly two years after the introduction of the rules without the correct paperwork.
For the breach, DNB fined Coinbase €3.3 million (approximately $3.6 million). But this amount was reduced by 5% as Coinbase claimed it “always intended to obtain registration.”
Coinbase introduced specific know-your-customer (KYC) rules for Dutch clients in June 2022. In practice, this meant users were obliged to provide the full name, address, and purpose of transfer when removing funds from the exchange.
Regulatory Challenges for Coinbase
Coinbase has been beset with legal challenges since the start of the year. On Jan. 4, it had to sign a $100 million settlement with regulators for violating anti-money laundering laws in New York.
This settlement included a $50 million fine and a $50 million commitment from Coinbase to enhance its compliance program.
Then on Jan. 18, the exchange announced discontinuing its operations in Japan due to “market conditions.” It also had to lay off 950 employees earlier this year to reduce its quarter-on-quarter expenses by 25%.
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