Coinbase Fined $3.6 Million By Dutch Central Bank: Here's Why

Coinbase was allegedly not adhering to compliance rules between November 2020 and "at least" August 2022. The firm finally got a proper registration on September 22, 2022.

The current imposition of fines comes at a very difficult time as Coinbase has been facing multiple issues for the past few months. 

Source : Getty

The Dutch Central Bank imposed a hefty fine of $3.6 million on the US Crypto exchange, Coinbase, for failing to get the legally appropriate registration prior to engaging in offering services in the Netherlands. The De Nederlandsche Bank (DNB) fined the crypto firm for its failure to comply with the local regulations for financial matters. The DNB said that it kept in mind the size of Coinbase as an organisation while saying that the firm has a "significant number of customers in the Netherlands."

Coinbase expressed its disagreement to the move and said that the current imposition of the fine does not include any criticism of their actual services, reported Reuters. It is planning to file an appeal.

The DNB tweeted that it imposes administrative fines on Coinbase Europe Limited for providing crypto services without the legally required registration until September 22, 2022. 

DNB imposes administrative fine on Coinbase Europe Limited for providing crypto services without the legally required registration until 22 September 2022. https://t.co/wEjAez6GDs pic.twitter.com/cDzXxKRqq4

— De Nederlandsche Bank (@DNB_NL) January 26, 2023

It also said Coinbase was not adhering to compliance rules between November 2020 and "at least" August 2022. Coinbase finally got a proper registration on September 22, 2022. According to a report by Reuters, a large number of doubtful transactions were made that were not noticed by the legal authorities.

However, Coinbase is not the only company to face such a heavy fine on it by the DNB. Crypto exchange KuCoin faced similar issues with the bank in December, 2022, on the allegations that it was functioning and offering financial services illegally, without legitimate licence.

Binanace Holdings Limited also was targeted in the same manner by the DNB in 2021. The bank had fined it for over 3 million Euros for license related violations.

The current imposition of fines comes at a very difficult time as Coinbase has been facing multiple issues for the past few months. For instance, on January 10 this year, the firm announced a 20 percent layoff in its workforce because of operational reasons.

Coinbase has been facing escalating issues as the firm announced its exit from Japan's crypto market because of unfavourable market conditions on January 18 this year.

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