Crypto.com, the prominent cryptocurrency trading platform, recently faced a significant financial penalty from the Netherlands Central Bank amounting to €2.85 million. The fine was imposed due to the platform operating within the European country without proper registration for a period of two years. This lack of registration goes against Dutch regulations that require crypto firms to register with the De Nederlandsche Bank (DNB) under the Anti-money Laundering and Anti-Terrorist Financing Act before conducting operations within the country.
The DNB emphasized the severity of Crypto.com’s noncompliance, stating that it persisted over a prolonged period from May 2020 to November 2022. This extended period of operating without registration was considered a severe violation, leading to a fine exceeding the base amount of €2 million. The regulator pointed out that Crypto.com had a substantial customer base in the Netherlands, allowing the platform to gain an unfair competitive advantage by evading regulatory fees for two years.
It is essential to note that this is not the first time the DNB has penalized a crypto-related platform for failing to comply with local regulations. In the previous year, major cryptocurrency exchanges such as Binance and Coinbase were fined over $3 million for allegedly operating in the country without proper registrations. Following the penalty, Binance made the decision to exit the country due to the inability to obtain licensing. This demonstrates the strict stance taken by the Dutch regulatory authorities towards noncompliance within the cryptocurrency industry.
Despite the imposed fine, Crypto.com has taken steps to appeal against the penalty in October 2023. It was also disclosed that the platform registered with the Apex Bank in July, subsequently becoming one of the 40 licensed crypto entities in the country. The appeal process highlights the complexity of regulatory compliance in the cryptocurrency sector and the repercussions that may arise from noncompliance with established regulations.
The recent financial penalty imposed on Crypto.com by the Netherlands Central Bank sheds light on the importance of regulatory compliance within the cryptocurrency industry. The severity of the fine reflects the regulatory authorities’ commitment to enforcing rules and regulations to safeguard the interests of investors and maintain the integrity of the financial system. It serves as a reminder to all cryptocurrency firms to adhere to local regulations and ensure proper registration before conducting operations within a specific jurisdiction.