Dutch central bank fines Crypto(dot)com $3 million

Crypto(dot)com has been fined by Dutch central bank DNB for circumventing registration requirements over a long period of time.

According to Coindesk, the fines were issued for a variety of reasons, one of which was serving a “significant number” of customers in the Netherlands, in addition to failing to pay supervision fees.

Crypto(dot)com’s failure

The company reportedly failed to register while providing cryptocurrency services for more than two years, and was fined $3 million last October. However, news of the fine was not made public until recently.

Crypto(dot)com, or Foris DAX MT, has decided to ignore compliance requirements and continue to operate without registration until at least November 8, 2022. In addition to this DNB stated that standard fines for such activities start at $2.5 million. However, considering the boldness and seriousness of the situation, the level of punishment was increased.

Crypto.com’s failure to report suspicious transactions to the Netherlands Financial Intelligence Unit (FIU) was a serious shortcoming in its fight against money laundering and terrorist financing, according to the report.

Crypto(dot)com eventually secured registration in the Netherlands until July 2023. However, DNB has previously stated that Dutch customers can use the exchange without issue despite it operating illegally.

Similarities between Crypto(dot)com and Binance

Crypto(dot)com’s situation is interesting to compare with Binance, which was hit with a larger fine of €3.6 million ($4.2 million) for similar registration evasion. This led to its withdrawal from the Dutch market after a failed registration attempt.

In addition, Crypto.com ignored the fine and declared that it was “a case that has been resolved in the past,” assuring customers that it was business as usual.

Crypto(dot)com’s unregistered status gave it a competitive advantage by avoiding oversight fees and compliance costs. However, it failed to report any unusual transactions to the Financial Intelligence Unit-Netherlands. This occurred during the period of non-compliance that was taken into account when the fine was imposed.

Crypto(dot)com appealed DNB’s decision on October 9 and was approved for registration in the Netherlands in July 2023. According to a DNB spokesperson, Dutch customers are legally allowed to use the exchange despite it being operational. illegally.

Kraken VASP registration completed

Another large cryptocurrency exchange, Kraken, recently obtained its fourth European license and proudly displayed its Virtual Asset Service Provider (VASP) registration from DNB. The VASP license is one of the most important components of a set of regulations known as MiCA (Marketplace in Crypto Assets). This is to strictly control digital asset business within the European Union.

Armed with the necessary regulatory approvals, Kraken’s entry into the Dutch market could be a game-changer. It is said that approximately 20% of Dutch citizens currently own cryptocurrency.

summary

Crypto(dot)com ignored compliance requirements and operated without registration until November 8, 2022. DNB said fines for such conduct start at $2.5 million. Another cryptocurrency exchange, Kraken, has obtained its fourth European license and proudly displays its VASP registration from DNB.

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Andrew is a blockchain developer who became interested in cryptocurrency while majoring in blockchain development in graduate school. He has a keen eye for detail and shares a passion for writing and coding. His back-end knowledge of blockchain helps provide a unique perspective on the craft of writing and reliable skills in explaining concepts such as blockchain programming, language, and token issuance. He also frequently shares technical details and performance indicators of ICOs and IDOs.