The Dutch Central Bank (DeNederlandscheBank) has charged Coinbase for having ineffective anti-money laundering checks.
Coinbase, the second largest crypto exchange network by volume, has been fined €3.3 Million ($3.58 Million) by the Dutch Central Bank (De Nederlandsche Bank) over a lack of compliance with local regulators and crypto transactions to unregistered customers in the country.
According to DNB, “The fine was imposed because Coinbase provided crypto services in the Netherlands in the past without registration with DNB, which is in non-compliance with the law.”
All firms aiming to run crypto services in the Netherlands should register with DNB first as per the rules of the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act. Coinbase is charged with a “category 3 fine,” according to which the base amount is €2 million. The figure was raised “due to the severity and degree of culpability of the non-compliance.”
DNB handed €3,325,000 fines for several reasons, including that “Coinbase has a significant number of customers in the Netherlands that make use of its crypto services.”
Adding to the fact that Coinbase is one of the renowned names in the crypto services industry, the bank also raised the fine,
DNB Stated, “Coinbase has 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.”
The non-compliance from Coinbase was also considered “very severe” by the bank’s authority since it persisted from 15th, November 2020, until the end date of DNB’s examination which was 24th Aug 2022.
The Netherlands first announced the registration requirement for crypto service providers on 21st May 2020, “due to the high risk of money laundering and terrorist financing associated with crypto services.”
The registration requirement also allows DNB to track risks of illegal financial activity flows more efficiently.
By failing to obtain registration on time, Coinbase could not report any unusual transactions to FIU (Financial Intelligence Unit) Netherlands before the date. “As a result, a large number of unusual transactions may have gone unnoticed by the investigative authorities during this period,” DNB said.
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