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Dutch Central Bank Hits Coinbase With $3.6M Fine for Trading Without Registration

2 mins
Updated by Geraint Price
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In Brief

  • The Dutch Central Bank has fined Coinbase €3.3 million for operating without proper registration.
  • Recently, it was fined $50 million for violating AML laws in New York.
  • 2023 has been a year full of challenges for the Brian Armstrong-led exchange.
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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.

The Dutch central bank also fined Binance in July 2022 for unlicensed crypto services. DNB also issued a public warning to Binance in 2021, calling its services illegal.

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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For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Top crypto platforms in the US | March 2024

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Harsh Notariya
Harsh Notariya excels in delivering SEO-optimized crypto news under tight deadlines. Previously, as a Growth Marketer at Sporty and a Community Consultant at Totality Corp, he significantly boosted community engagement and followers. Harsh also crafted engaging content for top crypto influencer Shivam Chhuneja, blending meme references for an educational yet fun experience. His versatile skills make him a notable figure in crypto journalism.
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