Dutch Central Bank Fined Crypto.com €2.85M For Offering Unregistered Services
Crypto.com faces a €2.85 million fine by the Dutch Central Bank for operating without mandatory registration.
In a significant development underscoring the regulatory challenges within the cryptocurrency industry, De Nederlandsche Bank (DNB) has revealed it has imposed a €2.85 million fine on the cryptocurrency exchange Crypto.com, for operating without proper registration. This decision, announced on March 13 but rooted in actions dating back to October of the previous year, signals a tightening grip on crypto services’ regulatory oversight in the Netherlands.
The fine targets Foris DAX MT Limited, the entity behind Crypto.com, pinpointed for offering crypto exchange services from May 21, 2020, to at least November 8, 2022, without adhering to the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act’s registration mandate. This lapse provided Crypto.com an unfair advantage, allowing it to bypass the supervisory fees and compliance costs that its competitors bore.
Initially set at €2 million, the fine was escalated due to the severity of the violation and the company’s degree of culpability. This adjustment reflects the DNB’s stringent approach to enforcing its relatively new registration requirements for crypto service providers, introduced on May 21, 2020, aiming to curb money laundering and terrorist financing risks within the crypto sector.
Crypto.com’s response to the fine was to object to the DNB’s decision on October 9, demonstrating the contentious nature of regulatory interpretations in the fast-evolving crypto landscape. Nevertheless, the exchange has made strides toward compliance, securing its registration with the DNB in July 2023, a crucial step in aligning its operations within the Netherlands’ regulatory framework.
This incident is not isolated within the Netherlands’ crypto market. Similar fines were levied against Binance and Coinbase, showcasing the DNB’s active role in establishing a compliant and secure crypto environment. Currently, the Netherlands boasts 41 registered crypto service providers, illustrating a growing adherence to regulatory standards among industry participants.
The fine imposed on Crypto.com underscores a critical juncture for the crypto industry, highlighting the essential balance between innovation and compliance. As cryptocurrencies continue to permeate mainstream finance, regulatory bodies worldwide are clarifying their expectations, imposing sanctions to enforce compliance, and protect consumers.
This action against Crypto.com serves as a reminder of the regulatory obligations that come with operating in the crypto space, particularly in jurisdictions like the Netherlands that are keen on maintaining a clean, safe, and regulated financial environment. It also signals to other crypto entities the importance of proactive engagement with regulatory requirements to avoid similar punitive measures.
