The Dutch Central Bank Fines Crypto.com for Providing Unregistered Services
The Dutch Central Bank (DNB) has imposed an administrative fine on Crypto.com, also known as Foris DAX MT Limited, for operating and providing crypto services illegally in the Netherlands for over two years. The exchange was found to be in non-compliance with the country’s law and operated without registration.
Crypto.com Operated Illegally in the Netherlands
DAX MT, also known as Crypto.com, has been fined by the Dutch Central Bank for offering crypto services without the required registration. The exchange operated unregistered in the Netherlands for over two years, which is a violation of the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft).
Violation of Registration Requirement
- Companies offering crypto services in the Netherlands must register with the DNB under the Wwft.
- Crypto.com operated without registration for over two years.
- The exchange offered professional or business services for the exchange of virtual currencies without registration with the DNB.
- Crypto.com also offered custody wallets without proper registration.
DNB Imposes Fine on Crypto.com
The Dutch Central Bank has categorized Crypto.com’s non-compliance with the registration requirement as a Category 3 fine. The base amount of the fine is €2 million ($2.17 million), but it can be reduced to €0 or increased to a maximum of €4 million ($4.35 million) depending on various factors.
Fine Raised to $3.1 Million
- DNB raised Crypto.com’s fine from the base amount to €2.85 million ($3.1 million) due to the severity and degree of culpability of the non-compliance.
- The exchange’s substantial reach in the Netherlands and competitive advantage over registered competitors were considered for the increase.
- Crypto.com enjoyed a competitive advantage as it didn’t have to pay supervisory fees or incur other compliance costs.
Previous Fines on Crypto Exchanges
The Dutch Central Bank has previously fined other crypto exchanges for operating unregistered in the Netherlands. Coinbase and Binance received fines of over €3 million for their unauthorized services. Binance ceased operations in the country, while Coinbase obtained regulatory approval.
Crypto.com’s Registration Approval
- Crypto.com obtained its DNB registration in July 2023, officially joining the authorized centralized exchanges operating in the Netherlands.
- However, the exchange is still subject to the imposed administrative fine for its previous period of operation without authorization.
Hot Take: DNB Cracks Down on Unregistered Crypto Services
The Dutch Central Bank continues to enforce registration requirements for crypto service providers in the Netherlands. By imposing fines on exchanges like Crypto.com, it aims to ensure compliance with anti-money laundering and terrorist financing regulations. The severity of the fine reflects the seriousness with which the DNB views non-compliance. Crypto exchanges operating in the country must prioritize registration and adhere to regulatory standards to avoid penalties and maintain a level playing field with registered competitors.
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