2024

Bank AI

Million

Fine

De Nederlandsche Bank (DNB) revealed it imposed an administrative fine on centralized exchange Crypto.com after it allegedly operated and provided crypto services illegally for over two years in the Netherlands. 
<h2 style="font-weight: 400;" id="crypto-com-fined-for-providing-unregistered-services">Crypto.com Fined For Providing Unregistered Services</h2> 
The Dutch Central Bank <a href="https://www.dnb.nl/en/sector-news/enforcement-measures-2024/fine-for-foris-dax-mt-limited-crypto-com-for-having-provided-crypto-services-without-the-required-registration-until-2-august-2023/" target="_blank" rel="noopener nofollow">fined</a> Foris DAX MT Limited (DAX MT), known as ‘Crypto.com,’ over “non-compliance” with the country’s law. DAX MT operated unregistered in the Netherlands and offered crypto services for over two years. 
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
 Fine for Foris DAX MT Limited (<a href="https://t.co/GpTkySLssK" rel="nofollow" target="_blank">https://t.co/GpTkySLssK</a>) for providing crypto services without the required registration.<a href="https://t.co/qCNBA6iW5H" rel="nofollow" target="_blank">https://t.co/qCNBA6iW5H</a> 
 — De Nederlandsche Bank (@DNB_NL) <a href="https://twitter.com/DNB_NL/status/1767850578816757890?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">March 13, 2024</a>
</blockquote> 
Companies must <a href="https://bitcoinist.com/kraken-unveil-secret-europe-dutch-approval-unlocked/" target="_blank" rel="noopener ">register</a> with the DNB under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) to be authorized to offer crypto services in the Netherlands. 
The DNB found the exchange punishable for over two years of operations without registration. As the official <a href="https://www.dnb.nl/media/xxlng31d/openbare-versie-bestuurlijke-boete-foris-dax-mt-limited.pdf" target="_blank" rel="noopener nofollow">document</a> read: 
<blockquote> 
 Violations found given the aforementioned investigation, in conjunction with the legal framework, DNB finds the following. 
 DNB finds that since 21 May 2020 until at least 8 November 2022 DAX MT has been in breach of Section 23b(1) and (2) and Section 23c(3) of the Wwft by offering professional or business services for the exchange of virtual currencies without registration with DNB in the Netherlands to offer professional or business services for the exchange between virtual currency and fiduciary currency and the offering of custody wallets. 
</blockquote> 
As a result, the Dutch Central Bank categorized the exchange’s “non-compliance with Wwft” as a Category 3 fine. This fine has a base amount of €2 million ($2.17 million), which can be reduced to €0 or increased to a maximum of €4 million ($4.35 million). 
<h2 style="font-weight: 400;" id="fine-raised-to-3-1-million-for-its-severity">Fine Raised To $3.1 Million For Its “Severity”</h2> 
DNB considers the “severity and degree of culpability of the non-compliance” enough to raise the fine from the base amount to €2.85 million ($3.1 million). For the increase, the Dutch Central Bank considered the exchange’s substantial reach in the Netherlands, as many customers use its services. 
Additionally, it was considered that DAX MT enjoyed a considerable competitive advantage over its registered competitors as it didn’t have to pay “any supervisory fees to DNB or incur any other costs for compliance with the Wwft.” 
The severity of the “non-compliance” argument is determined by the <a href="https://bitcoinist.com/dutch-central-bank-fines-binance/" target="_blank" rel="noopener ">prolonged period</a> it persisted over. Moreover, the DNB considers that the fine’s increase shouldn’t be moderated based on the exchange’s “carrying capacity”: 
<blockquote> 
 DAX MT has not pleaded limited ability to pay, also otherwise, there is no evidence of limited ability to pay. DNB therefore sees no reason to moderate the amount of the fine based on step 8 (carrying capacity) of the roadmap. 
</blockquote> 
This isn’t the Dutch Central Bank’s first rodeo with administrative fines. After introducing the registration requirement for crypto service providers in May 2020, the DNB fined several crypto exchanges for operating unregistered in the Netherlands. 
Coinbase and Binance previously received fines of over €3 million for their unauthorized services. Ultimately, Binance ceased all operations in the Netherlands after failing to obtain registration approval by the DNB, while Coinbase gained its regulatory approval in September of 2022. 
Similarly, Crypto.com <a href="https://bitcoinist.com/crypto-com-registration-approval-in-the-netherlands/" target="_blank" rel="noopener ">obtained</a> its DNB registration in July 2023, officially joining the centralized exchanges authorized to operate in the country. Despite this, the exchange must face the imposed administrative fine for the period it operated before the authorization. 
<img loading="lazy" decoding="async" class="size-large wp-image-287171 aligncenter" src="https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=980&amp;resize=980%2C493" alt="CRO, CROUSDT, Crypto" width="980" height="493" srcset="https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=1022 1022w, https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=980&amp;resize=980%2C493 980w, https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=360 360w, https://bitcoinist.com/wp-content/uploads/2024/03/CROUSDT_2024-03-14_12-50-42.png?w=750 750w" sizes="(max-width: 980px) 100vw, 980px" data-recalc-dims="1">

Crypto Exchange Fined $3.1M By Dutch Central Bank For “Non-Compliance”

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