First Binance and Now Coinbase Have Both Been Fined $3.3m in Netherlands

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First Binance and Now Coinbase Have Both Been Fined $3.3m in Netherlands

<p>The leading
digital assets <a href="https://www.financemagnates.com/terms/e/exchange/" class="terms__main-term" id="b5da6e64-2afe-421d-9b81-16404b7d59d6" target="_blank">exchange</a> Coinbase has been slapped with a hefty $3.3 million fine by the
Dutch central bank, De Nederlandsche Bank (DNB). A fine of an identical amount
was paid a few months earlier by its rival platform <a href="https://www.financemagnates.com/tag/binance/" target="_blank" rel="follow">Binance</a>.</p><p>According
to the DNB's press release, the fine was imposed due to unauthorized crypto
activities at the Coinbase exchange, from November 2020 until at
least 24 August 2022.</p><p>Coinbase Europe Limited
Fined by DNB</p><p>The
Coinbase European subsidiary, Coinbase Europe Limited, has been operating
unregistered in the Netherlands since at least November 2020. Earlier in May of
the same year, the DNB imposed a registration requirement on all cryptocurrency
service providers due to the high risk of money laundering and terrorist
financing. </p><p>The base
fine for a violation committed by Coinbase is €2 million, but it was increased due
to the fact that Coinbase is one of the largest cryptocurrency exchanges in the
world and has a large number of consumers in the Netherlands. </p><p>"In
addition, 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. A further important reason for the increased
fine is that the non-compliance persisted over a prolonged period," DNB
stated.</p><p>The
decision to impose the fine was made on 18 January, but the official
announcement was not released to the media until 26 January.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">DNB imposes administrative fine on Coinbase Europe Limited for providing crypto services without the legally required registration until 22 September 2022. <a href="https://t.co/wEjAez6GDs">https://t.co/wEjAez6GDs</a> <a href="https://t.co/cDzXxKRqq4">pic.twitter.com/cDzXxKRqq4</a></p>-- De Nederlandsche Bank (@DNB_NL) <a href="https://twitter.com/DNB_NL/status/1618523195161858049?ref_src=twsrc%5Etfw">January 26, 2023</a></blockquote><p>Binance Paid a Similar Fine
in July</p><p>The Dutch
regulator <a href="https://www.financemagnates.com/cryptocurrency/regulation/binance-fined-33-million-by-dutch-central-bank/" target="_blank" rel="follow">imposed an identical fine on Binance last July</a>.
Binance was required to pay a penalty of €3.3 million for offering local investors access
to cryptocurrency services without proper regulation.</p><p>DNB's
explanation at the time was very similar: Binance is a large exchange with a
sizable customer base, which used a competitive advantage in failing to comply
with local regulations. The Dutch regulator pointed to the anonymity of
cryptocurrencies, which can become a tool for <a href="https://www.financemagnates.com/terms/m/money-laundering/" class="terms__secondary-term" id="f30ffb65-351e-44d6-9dae-0714f08b59b2" target="_blank">money laundering</a> without proper oversight.</p><p>"The
registration requirement for crypto service providers was introduced on 21 May 2020 because of the high risk of money laundering and terrorist financing
associated with crypto services. This is related to the anonymity associated
with crypto transactions. The registration requirement enables DNB to monitor
the risk of illicit financial flows more effectively," the regulator
explained.</p><p>Almost a
year earlier, the DNB had issued a public warning against Binance for
unauthorized activity. <a href="https://www.financemagnates.com/cryptocurrency/news/the-fcas-binance-warning-what-does-this-meaning-for-uk-crypto-regulation/" target="_blank" rel="follow">Several other regulators have published similar notices.</a></p><p>Watch the recent FMLS 2022 Executive Interview with Lory Kehoe, the Director of EMEA Business Development at Coinbase.</p><p>Coinbase Faces Crypto
Winter Troubles</p><p>The fine
imposed on Coinbase adds to the recent problems the platform has faced. At a
time when <a href="https://www.financemagnates.com/cryptocurrency/binance-hires-when-coinbase-cuts-employment-amidst-crypto-winter/" target="_blank" rel="follow">rival Binance is increasing its headcount</a>, Coinbase has decided to shed its
workforce in the face of a prolonged cryptocurrency winter.</p><p>Due to the
staff cuts, the platform <a href="https://www.financemagnates.com/cryptocurrency/coinbase-stops-operations-in-japan-due-to-market-volatility/" target="_blank" rel="follow">has decided to suspend its operations in the Japanese
market</a>. All local customers must withdraw their funds and transfer them to
another platform until 16 February 2023.</p><p>"Due
to market conditions, our company has made the difficult decision to halt
operations in Japan and to conduct a complete review of our business in the
country. However, we are committed to making this transition as smooth as
possible for our valued customers," Coinbase wrote in a blog post.</p><p>Many other
cryptocurrency exchanges have reported job cuts in the period. <a href="https://www.financemagnates.com/cryptocurrency/crypto-platform-luno-sheds-35-of-workforce/" target="_blank" rel="follow">Luno announced a
similar decision this week</a>, reducing its workforce by 35%. Earlier, a potential
reduction was announced by Crypto.com, looking to lay off up to 20% of current
employees.</p>

This article was written by Damian Chmiel at www.financemagnates.com.

Source: First Binance and Now Coinbase Have Both Been Fined $3.3m in Netherlands