The Dutch central bank (DNB) fined Coinbase, a cryptocurrency exchange based in the United States, €3.3 million ($3.6 million) for not obtaining the necessary registration before operating in the country.
According to the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), digital asset service providers who want to conduct business in the Netherlands must register with the central bank, the DNB explained in a press release on Thursday.
According to the DNB, Coinbase violated this law from November 15, 2020, to August 24, 2022, at the latest. The exchange was also hit with an administrative fine of €3,325,000, or approximately $3.6 million.
A category 3 fine, which can be as little as €0 or as much as €4 million, is imposed for Coinbase’s noncompliance. The central bank claimed that when raising the fine, it considered elements such as Coinbase’s status as one of the biggest cryptocurrency service providers in the world.
“Moreover, Coinbase has a significant number of customers in the Netherlands that make use of its crypto services,” the DNB said, noting that the exchange has also 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 late September of last year, Coinbase received its Wwft registration. According to the central bank, the exchange also received a 5% discount because it “always intended to obtain” the registration.
The exchange can contest the fine until March 2.
Coinbase has also been under regulatory scrutiny in the United States, which is why the fine was imposed. Coinbase agreed to pay a total of $100 million earlier this month to resolve a complaint about “certain historical shortcomings” in its work on regulatory compliance.
“Coinbase was unable to create and sustain a workable compliance program that could keep up with its expansion. At the time, Adrienne Harris, the superintendent of the New York DFS, stated that the Coinbase platform was vulnerable to possible criminal activity due to that failure.
The exchange has also taken some drastic steps to reduce expenses amid the current crypto winter. Last week, the platform announced that it was leaving Japan because of the state of the market. Additionally, Coinbase announced earlier this month that it was laying off 950 employees, or 20% of its workforce, in its third round of layoffs.
After going public in April 2021 and reaching an all-time high of about $370, Coinbase’s shares have since plummeted, losing nearly 90% of their value in comparison to previous highs. At $53.72, the company’s shares are up 1.82% in pre-market trading.