Coinbase Fined $3.6M by Dutch Central Bank – Here’s Why
United States-based cryptocurrency exchange Coinbase has been fined €3.3 million ($3.6 million) by the Dutch central bank (DNB) for failing to obtain the required registration before operating in the jurisdiction.
In a Thursday press release, the DNB detailed that digital asset service providers wishing to operate in the Netherlands are required to register with the central bank under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft).
The DNB said that Coinbase failed to comply with this law during the period between 15 November 2020 and at least 24 August 2022, adding that it has imposed an administrative fine of €3,325,000, or around $3.6 million, on the exchange.
Coinbase’s non-compliance is punishable by a category 3 fine, which can range from a minimum amount of €0 and a maximum amount of €4 million. The central bank said it took into account factors like Coinbase being one of the largest crypto service providers globally while increasing the fine.
“Moreover, Coinbase has a significant number of customers in the Netherlands that make use of its crypto services,” the DNB said, noting that the exchange has also 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.”
Coinbase obtained its Wwft registration in late September last year. The exchange also got a 5% discount because it “always intended to obtain” the registration, the central bank said.
The exchange has until March 2 to object to the fine.
The fine comes as Coinbase has also faced some regulatory scrutiny in the US. Earlier this month, Coinbase agreed to shell out a total of $100 million to settle a complaint relating to “certain historical shortcomings” in its regulatory compliance work.
“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. That failure exposed the Coinbase platform to potential criminal activity,” New York DFS superintendent Adrienne Harris said at the time.
Amid the ongoing crypto winter, the exchange has also taken some extreme measures to cut costs. The platform revealed last week that is exiting Japan due to market conditions. Furthermore, Coinbase announced its third round of layoffs earlier this month, reducing its headcount by a total of 950 employees, or 20% of its workforce.
Shares of Coinbase, which went public in April 2021 and hit an all-time high of around $370, have since taken a nosedive, losing almost 90% of their value compared to all-time highs. The company’s shares are currently up 1.82% in pre-market at $53.72.