Dutch Central Bank Fines Crypto.com €2.85M for Operating Without Registration
Summary:
The Central Bank of the Netherlands imposed a fine of 2.85 million euros ($3 million) on Crypto.com for operating without registration for over two years. The penalty was announced in March 2023, but it was imposed back in October 2022. During the non-compliant period, Crypto.com reportedly skipped paying supervision and compliance fees and failed to report unusual transactions. Crypto.com registered with the Dutch authorities in July 2023 and reassured users and the public that the incident has not impacted its current services or operations.
The Dutch Central Bank, or De Nederlandsche Bank (DNB), imposed a fine on Crypto.com after it operated without registration for more than two years. The punitive action was carried out in October, but only made known on March 13, leaving many to question why the disclosure was delayed. On October 23, Foris DAX MT, commercially operating as Crypto.com, received a fine amounting to 2.85 million euros ($3 million) for offering crypto services without proper registration from May 21, 2020, to at least November 8, 2022. The start date for registration requirements as mandated by DNB was May 21, 2020.
DNB insists that all crypto service providers must be registered in line with the Dutch regulation against money laundering and terrorist financing. The base fine fee was 2 million euros, but due to the serious violation and culpability level, the fine was increased. Source: @DNB_NL via Twitter
Crypto.com seemingly outmanuvered its competitors by avoiding paying supervision fees and compliance-related costs. The platform managed to secure a "significant number" of customers during the non-compliant period, and due to not being registered, failed to report any suspicious transactions to the Financial Intelligence Unit-Netherlands. On October 9, an objection was filed by Crypto.com against the DNB's decision.
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As of July 2023, Crypto.com is registered in The Netherlands. Despite earlier illicit operations, a DNB representative confirmed to CoinTelegraph that Dutch exchange users were legally allowed to continue using these services. On March 13, the exchange's representative told CoinTelegraph: “The fine is related to a matter that has already been resolved, and it does not affect our current operations or services. […] We promptly and transparently addressed the issues raised.”
The registration requirement for crypto service providers was introduced by DNB in April 2022. Following this, a penalty of 3.3 million euros ($3.5 million) was issued to Binance for operating without registration. This happened after an August 2021 warning from DNB. After an unsuccessful attempt to register, Binance announced their decision to cease operations in The Netherlands in June 2022. There are currently 41 registered crypto service providers in the country.
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Published At
3/13/2024 9:10:52 PM
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