Crypto exchange Coinbase was hit with a fine by the Dutch central bank for providing its services in the country before obtaining the required registration.
The trading platform is contemplating appealing against the fine and it has until March to be able to do so.
An administrative fine was imposed on January 18th, 2023 on Coinbase Europe Limited by De Nederlandsche Bank (DNB) of about €3,325,000, which is more than $3.6 million.
The announcement said that the penalty had been imposed on Coinbase because it had operated in the Netherlands without registering itself with the DNB in the past period.
According to the regulatory authority, this comes under non-compliance with the country’s rules as it is a requirement for crypto companies offering their services in the Netherlands to register with the DNB.
This is in accordance with the Anti-Terrorist Financing and Anti-Money Laundering Act. According to the monetary authority, €2 million is the base amount for fines that are part of this category.
However, they had opted to increase the fine amount in the case of Coinbase because of the degree of culpability and severity of the exchange’s non-compliance.
The bank stated that DNB had increased the fine because it had considered the fact that Coinbase was one of the biggest crypto service providers all over the globe.
Furthermore, it added that the crypto exchange also has a substantial number of clients in the Netherlands that utilize its crypto services.
The central bank also stated that no supervisory fee had been paid by the crypto exchange. It highlighted that Coinbase had operated in the country for a prolonged period of time without a license.
This occurred from November 2020 and continued till August 2022. The Dutch central bank asserted that it considers this act to be severe non-compliance.
But, the bank did make the decision of reducing the fine by 5%, as it said that it had always been Coinbase’s intention to obtain registration in the country, a goal it had accomplished last year on September 22nd.
The requirement for crypto service providers to obtain registration in the Netherlands before offering their services had been introduced in May 2020.
Since the crypto exchange was not registered in the country, it meant that it had not reported any unusual transactions that may have occurred to the Dutch Financial Intelligence Unit in the time period.
The bank said that there is a possibility that many of these transfers may have been unnoticed by the authorities.
Coinbase has until March 2nd, 2023 to object to the fine. The exchange stated that it was not in agreement with the DNB over this matter because it did not include criticism of the services provided.
Therefore, the crypto company is pondering over the idea of an appeal. A similar measure had been imposed against Binance by the DNB in July 2022.
The same fine had also been imposed on the largest crypto exchange in the world for its failure to register in the Netherlands before offering its services.