The leadingdigital assets exchange Coinbase has been slapped with a hefty $3.3 million fine by theDutch central bank, De Nederlandsche Bank (DNB). A fine of an identical amountwas paid a few months earlier by its rival platform Binance.
Accordingto the DNB's press release, the fine was imposed due to unauthorized cryptoactivities at the Coinbase exchange, from November 2020 until atleast 24 August 2022.
TheCoinbase European subsidiary, Coinbase Europe Limited, has been operatingunregistered in the Netherlands since at least November 2020. Earlier in May ofthe same year, the DNB imposed a registration requirement on all cryptocurrencyservice providers due to the high risk of money laundering and terroristfinancing.
The basefine for a violation committed by Coinbase is €2 million, but it was increased dueto the fact that Coinbase is one of the largest cryptocurrency exchanges in theworld and has a large number of consumers in the Netherlands.
"Inaddition, Coinbase has enjoyed a competitive advantage in that it has not paidany supervisory fees to DNB or incurred other costs in connection with DNB'sregular supervision activities. A further important reason for the increasedfine is that the non-compliance persisted over a prolonged period," DNBstated.
Thedecision to impose the fine was made on 18 January, but the officialannouncement was not released to the media until 26 January.
DNB imposes administrative fine on Coinbase Europe Limited for providing crypto services without the legally required registration until 22 September 2022. https://t.co/wEjAez6GDs pic.twitter.com/cDzXxKRqq4
— De Nederlandsche Bank (@DNB_NL) January 26, 2023
Binance Paid a Similar Finein July
The Dutchregulator imposed an identical fine on Binance last July.Binance was required to pay a penalty of €3.3 million for offering local investors accessto cryptocurrency services without proper regulation.
DNB'sexplanation at the time was very similar: Binance is a large exchange with asizable customer base, which used a competitive advantage in failing to complywith local regulations. The Dutch regulator pointed to the anonymity ofcryptocurrencies, which can become a tool for money laundering without proper oversight.
"Theregistration requirement for crypto service providers was introduced on 21 May 2020 because of the high risk of money laundering and terrorist financingassociated with crypto services. This is related to the anonymity associatedwith crypto transactions. The registration requirement enables DNB to monitorthe risk of illicit financial flows more effectively," the regulatorexplained.
Almost ayear earlier, the DNB had issued a public warning against Binance forunauthorized activity. Several other regulators have published similar notices.
Watch the recent FMLS 2022 Executive Interview with Lory Kehoe, the Director of EMEA Business Development at Coinbase.
Coinbase Faces CryptoWinter Troubles
The fineimposed on Coinbase adds to the recent problems the platform has faced. At atime when rival Binance is increasing its headcount, Coinbase has decided to shed itsworkforce in the face of a prolonged cryptocurrency winter.
Due to thestaff cuts, the platform has decided to suspend its operations in the Japanesemarket. All local customers must withdraw their funds and transfer them toanother platform until 16 February 2023.
"Dueto market conditions, our company has made the difficult decision to haltoperations in Japan and to conduct a complete review of our business in thecountry. However, we are committed to making this transition as smooth aspossible for our valued customers," Coinbase wrote in a blog post.
Many othercryptocurrency exchanges have reported job cuts in the period. Luno announced asimilar decision this week, reducing its workforce by 35%. Earlier, a potentialreduction was announced by Crypto.com, looking to lay off up to 20% of currentemployees.
The leadingdigital assets exchange Coinbase has been slapped with a hefty $3.3 million fine by theDutch central bank, De Nederlandsche Bank (DNB). A fine of an identical amountwas paid a few months earlier by its rival platform Binance.
Accordingto the DNB's press release, the fine was imposed due to unauthorized cryptoactivities at the Coinbase exchange, from November 2020 until atleast 24 August 2022.
TheCoinbase European subsidiary, Coinbase Europe Limited, has been operatingunregistered in the Netherlands since at least November 2020. Earlier in May ofthe same year, the DNB imposed a registration requirement on all cryptocurrencyservice providers due to the high risk of money laundering and terroristfinancing.
The basefine for a violation committed by Coinbase is €2 million, but it was increased dueto the fact that Coinbase is one of the largest cryptocurrency exchanges in theworld and has a large number of consumers in the Netherlands.
"Inaddition, Coinbase has enjoyed a competitive advantage in that it has not paidany supervisory fees to DNB or incurred other costs in connection with DNB'sregular supervision activities. A further important reason for the increasedfine is that the non-compliance persisted over a prolonged period," DNBstated.
Thedecision to impose the fine was made on 18 January, but the officialannouncement was not released to the media until 26 January.
DNB imposes administrative fine on Coinbase Europe Limited for providing crypto services without the legally required registration until 22 September 2022. https://t.co/wEjAez6GDs pic.twitter.com/cDzXxKRqq4
— De Nederlandsche Bank (@DNB_NL) January 26, 2023
Binance Paid a Similar Finein July
The Dutchregulator imposed an identical fine on Binance last July.Binance was required to pay a penalty of €3.3 million for offering local investors accessto cryptocurrency services without proper regulation.
DNB'sexplanation at the time was very similar: Binance is a large exchange with asizable customer base, which used a competitive advantage in failing to complywith local regulations. The Dutch regulator pointed to the anonymity ofcryptocurrencies, which can become a tool for money laundering without proper oversight.
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"Theregistration requirement for crypto service providers was introduced on 21 May 2020 because of the high risk of money laundering and terrorist financingassociated with crypto services. This is related to the anonymity associatedwith crypto transactions. The registration requirement enables DNB to monitorthe risk of illicit financial flows more effectively," the regulatorexplained.
Almost ayear earlier, the DNB had issued a public warning against Binance forunauthorized activity. Several other regulators have published similar notices.
Watch the recent FMLS 2022 Executive Interview with Lory Kehoe, the Director of EMEA Business Development at Coinbase.
Coinbase Faces CryptoWinter Troubles
The fineimposed on Coinbase adds to the recent problems the platform has faced. At atime when rival Binance is increasing its headcount, Coinbase has decided to shed itsworkforce in the face of a prolonged cryptocurrency winter.
Due to thestaff cuts, the platform has decided to suspend its operations in the Japanesemarket. All local customers must withdraw their funds and transfer them toanother platform until 16 February 2023.
"Dueto market conditions, our company has made the difficult decision to haltoperations in Japan and to conduct a complete review of our business in thecountry. However, we are committed to making this transition as smooth aspossible for our valued customers," Coinbase wrote in a blog post.
Many othercryptocurrency exchanges have reported job cuts in the period. Luno announced asimilar decision this week, reducing its workforce by 35%. Earlier, a potentialreduction was announced by Crypto.com, looking to lay off up to 20% of currentemployees.
