A $3.3 million punishment against Coinbase is owed for engaging in illegal business in the Dutch market. Binance paid a comparable fine the previous year.
De Nederlandsche Bank, the Dutch central bank, has levied a hefty $3.3 million fine against the top digital asset exchange Coinbase (DNB). A similar fee was paid a few months prior by Binance, a competitor site.
The DNB press release states that the penalties were levied as a result of illegal cryptocurrency activity at the Coinbase exchange, which occurred between November 2020 until at least August 24, 2022.
European Coinbase Limited penalized by DNB
Since at least November 2020, Coinbase Europe Limited, a subsidiary of Coinbase, has operated illegally in the Netherlands. Due to the heightened danger of money laundering and terrorist funding, the DNB required all bitcoin service providers to register earlier in May of the same year.
The first fine for a violation by Coinbase was set at €2 million, but it was doubled because Coinbase is one of the biggest cryptocurrency exchanges in the world and has a sizable Dutch customer base.
“The fact that Coinbase has not paid any supervisory fees to DNB or suffered other costs in conjunction with DNB’s routine monitoring efforts has also given it a competitive edge. The fact that the non-compliance occurred over an extended period of time is another crucial factor in the higher penalties “DNB declared.
The decision to impose the fine was made on January 18, but it wasn’t until January 26 that the official announcement was made to the media.
In July, Binance paid a similar fine.
In July of last year, Binance was hit with a similar sanction by the Dutch authority. Binance was forced to pay a fine of €3.3 million for providing access to bitcoin services to local investors without legal authorization.
Binance is a significant exchange with a sizable customer base that leveraged a competitive advantage by flouting local laws, according to DNB’s justification at the time. The Dutch regulator referred to the anonymity of cryptocurrencies, which without effective regulation can be used as a weapon for money laundering.
“Due to the heightened danger of money laundering and terrorist funding linked with crypto services, the registration requirement for crypto service providers was implemented on May 21, 2020. This is connected to the anonymity of cryptocurrency transactions. The registration requirement makes it possible for DNB to more effectively monitor the risk of illicit financial flows, “The regulator spoke up.
The DNB had warned the public about Binance for illegal behaviour over a year earlier. Similar notices have been released by a number of other regulators.
Winter Crypto Issues for Coinbase
The penalty imposed on Coinbase intensifies the current issues the platform is experiencing. In the midst of a protracted cryptocurrency winter and as rival Binance expands its employees, Coinbase has made the decision to reduce its own.
The platform has made the decision to halt its activities in the Japanese market as a result of workforce reductions. Up until 16 February 2023, all local consumers must withdraw their money and transfer it to another platform.
“Our company has decided to suspend operations in Japan and conduct a thorough examination of our business there due to market conditions. However, we are dedicated to providing our cherished customers with the smoothest transition possible “Coinbase posted on its blog.
During the same time, numerous other bitcoin exchanges reported layoffs. This week, Luno announced a similar choice, cutting its personnel by 35%. Earlier, Crypto.com hinted at a possible downsizing and said it would fire up to 20% of its present staff.