Coinbase Fined by Dutch Central Bank for Non-Compliance

Regulatory Challenges for Coinbase

Coinbase, a prominent cryptocurrency service provider, faces a €3.3 million fine from the Dutch Central Bank (DNB) for non-compliance with Dutch registration regulations. The DNB reported that Coinbase provided crypto services in the Netherlands without the necessary registration, violating local laws. The fine reflects Coinbase's failure to adhere to the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), which requires businesses to register to mitigate risks related to terrorism and money laundering.

Timeline of Non-Compliance

Coinbase's period of non-compliance spans from November 15th, 2020, to at least August 24th, 2022. During this time, the company could not report unusual transactions, potentially allowing suspicious activities to go unnoticed by authorities. Although Coinbase eventually obtained the required registration on September 22nd, 2022, the DNB deemed the violation severe enough to warrant a significant fine.

Fine Calculation and Reduction

The DNB categorized the infringement under a category three fine, with a base amount set at €2 million. However, considering Coinbase's global presence and the extent of non-compliance, the fine was increased. The decision factored in Coinbase's avoidance of supervisory fees and the severity of the non-compliance. Despite these considerations, the DNB reduced the fine by 5%, acknowledging Coinbase's intent to comply.

Broader Implications for Coinbase

Coinbase's regulatory challenges are not limited to the Netherlands. The company was also fined $50 million by the New York State Department of Financial Services for similar non-compliance issues. Despite these setbacks, Coinbase continues to expand its partnerships and service offerings globally. As one of the largest cryptocurrency exchanges, how Coinbase navigates compliance requirements in the future will be closely watched by industry stakeholders.