Coinbase, the leading cryptocurrency exchange based in the United States, just got hit with a penalty of 3.3 million euros ($3.6 million) by the Dutch central bank (DNB) for failing to get the appropriate registration before providing crypto services in the Netherlands. The DNB stated that it had taken into account the fact that Coinbase was one of the largest corporations dealing in cryptocurrencies and had a substantial number of customers in the northwestern European country.

Coinbase Fined By Dutch Central Bank

The authorities asserted that the centralized exchange did not comply with the regulations over the time period extending from November 2020 to August 2022. And, in accordance with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act, businesses that operate in the Netherlands or intend to offer crypto-related services are required to register with the DNB first.

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On May 21, 2020, the central bank made it a necessity for crypto exchanges and crypto service providers to register with the government body in order to comply with the requirement. This was done due to the increased threat of money laundering and terrorism funding linked with crypto services — because of the anonymity that comes with it.

The Dutch Central Bank was quoted as saying:

Coinbase has enjoyed a competitive advantage in that it has not paid any supervisory fees to DNB or incurred other costs in connection with DNB’s regular supervision activities.

In addition, the central bank disclosed that the exchange has previously violated the objectives of the instructions by operating in the Netherlands and providing cryptocurrency services without first registering with the DNB. Because of this, Coinbase was unable to report suspicious transactions to the Financial Intelligence Unit of the country during the period in which it was non-compliant and will be unable to do so until September 22, 2022. As a direct consequence of this, it is possible that the investigative authorities missed a significant number of suspicious transactions during this time period.

Coinbase’s Growing Legal Troubles

Notedly, Coinbase’s business practices have already drawn the attention of government regulators and authorities. A settlement agreement in the amount of $100 million was reached between Coinbase Global Inc. and the New York Department of Financial Services (NYDFS) earlier this month. According to a statement issued by NYDFS, the organization observed that Coinbase considered its onboarding requirements for consumers as a “simple check-the-box” and did not conduct necessary background checks.

Coinbase right now has time till March 2 to submit an appeal to the Dutch central bank over the proposed penalties. It is anticipated that the share price of Coinbase (COIN) would react to the news as soon as the U.S. market opens up for trading on Thursday morning. As things currently stand, COIN price is marginally holding above the $50 mark–at $52.76–witnessing a significant drop of 1.48% yesterday.

Also Read: Coinbase Reveals 3 New Tokens To Get Listed Soon

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

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