Crypto(dot)com has been fined by the DNB, the central bank of the Netherlands for bypassing registration requirements for an extended period.



According to Coindesk, the penalty was enforced for various reasons, one of which was serving a “considerable amount” of clients in the Netherlands, in addition to failing to pay supervisory expenses.



The Failure From Crypto(dot)com



The company had reportedly failed to register for over two years while providing crypto services, and a fine of $3 Million was imposed in October. However, the news of the fine was not disclosed until recently.



Crypto(dot)com, or Foris DAX MT, opted to ignore compliance requirements and continue to operate without registering until at least November 8, 2022. In addition to this DNB revealed that the standard fine for such activities starts at  $2.5 Million. However, given the audacity and gravity of the situation, the penalty was increased.



Reportedly, Crypto(dot)com’s failure to report suspicious transactions to the Financial Intelligence Unit-Netherlands was a significant shortcoming in the fight against money laundering and terrorist financing. 



Crypto(dot)com eventually secured its registration in the Netherlands by July 2023. However, DNB previously stated that Dutch customers could use the exchange without any issues, even though it was operating illegally.



Crypto(dot)com’s Similarity With Binance 



Crypto(dot)com’s situation is interesting to compare to Binance’s, which faced a larger fine of €3.6 Million ($4.2 Million) for similar registration evasion. This is causing it to withdraw from the Dutch market following an unsuccessful registration attempt. 



In addition to this, Crypto(dot)com shrugged off the fine and declared that it was a “past and rectified incident,” assuring customers that it was business as usual.



Crypto(dot)com’s unregistered status gave it a competitive edge by avoiding supervisory fees and compliance costs. However, it was unable to report unusual transactions to the Financial Intelligence Unit-Netherlands. This took place during the period of non-compliance, which was taken into account when the fine was imposed.



Crypto(dot)com filed an objection to the DNB’s decision on October 9, and it was granted registration in the Netherlands in July 2023. According to a DNB spokesperson, Dutch customers had been permitted to use the exchange legally, even though it was operating illegally.



Kraken Received VASP registration



Kraken, another large crypto exchange, recently acquired its fourth European license and proudly displayed its Virtual Asset Service Provider (VASP) registration from DNB. The VASP license is one of the most critical components of a set of regulations known as MiCA (Markets in Crypto-Assets). These are intended to keep digital asset businesses under tight control within the European Union.



Kraken’s expansion into the Dutch market, armed with the necessary regulatory approvals, could be a game-changer. Currently, around 20% of Dutch citizens are said to own cryptocurrency.



Summary



Crypto(dot)com operated without registering until Nov 8, 2022, ignoring compliance requirements. DNB revealed the penalty for such activities starts at $2.5M. Kraken, another crypto exchange, acquired its fourth European license and proudly displayed its VASP registration from DNB.



Disclaimer



The views and opinions stated by the author or any people named in this article are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos, or other related indexes comes with a risk of financial loss.
Andrew Smith Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages ​​and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.