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Dutch Central Bank Fines Crypto.com for Violating Registration Rules

The Central Bank of Netherlands recently publicized financial penalties for the exchange platform called Crypto.com. The monetary institution noted that the fine was awarded on account of registration violations.

A Cointelegraph article covering the news revealed that Crypto.com filed an objection regarding the fine. However, the platform eventually filed for a registration and resumed operations in the region.

De Nederlandsche Bank (DNB) imposed the financial penalty on the crypto exchange for remaining operational for 2 years without registration. This fine was awarded in October but publicized on 13th March.

The authorities have refrained from sharing the details of the fine this month rather than making a public statement previously. On 23th October, DNB issued a fine notification for Foris DAX MT or Crypto.com.

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As per the official documentation, the fine is valued around 2.85 million euros or $3 million. Crypto.com offered trading services in the region starting from 21st May, 2020. DNB officials have penalized the exchange platform for operating an unregistered entity since 2020.

It is important to note that firms in Netherlands are required to apply register in accordance with the Dutch AML and Anti-Terrorist Financing Act.

Penalties against Crypto.com

DNB officials explained that the base amount of the fine was set around 2 million euros. However, this amount is subjected to increase depending on the severity and extent of financial damages.

DNB officials also took up an issue with Crypto.com for not paying supervisory and compliance costs. On this account, the exchange got an unfair advantage over its competitors.

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DNB stated that Crypto.com served a vast clientele for the duration. The central bank also criticized the exchange for not reporting unusual transactions to Financial Intelligence Unit of Netherlands throughout the non-compliance period. 

The exchange filed an objection against DNB fine. The firm noted that the fines addressed previous violations that are now rectified.

The statement assured investors that the fine does not have any impact on the ongoing operations or services. The management claimed that the reservations of the regulators were addressed in a timely and transparent manner. DNB mandated registration for crypto firms in April, 2022. On account of the same violations, Binance received a fine of 3.3 million euros or $3.5 million.

However, before the fine award, the company received a warning in August, 2021. The Cointelegraph article shared a list of 41 registered crypto exchanges in Netherlands.

Kraken Becomes the Latest Registered Crypto Exchange in Netherlands

Kraken exchange recently acquired a VASP license from the DNB. After becoming a registered VASP in the region, the firm can offer trading, transfer, and custodial services for cryptocurrencies in the region.

The firm holds 4 licenses in different jurisdictions of Europe operating as a registered entity. The firm confirmed the announcement on 8th February on social media.

Cryptocurrency firms operating in Europe are obligated to file for a registration in accordance with the Markets in Crypto-Assets Act (MiCA). Based on MiCA regulations, VASPs ensure compliance with European financial laws such as money laundering prevention, terror financing, client information disclosure, and maintaining transparency.

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Presence of Kraken in Europe

The crypto firm is working on European expansion. On this account, Kraken has obtained a VASP license in Spain, Ireland, and Italy. However, the firm is offering crypto services in Belgium via a licensed subsidiary.

Kraken noticed in a recent statement that Netherlands is highly suitable for tech startups and has one of the highest crypto adoption rates of 20% among European nations.

In October last year, Kraken acquired a local exchange named BCM. As per a Cointelegraph article, the acquisition is currently incomplete due to regulatory approval. The regulatory progress of Kraken is nothing like regulatory challenges in the United States.

The San Francisco-based fought a lawsuit from the Securities and Exchange Commission (SEC) for operating as an unregistered security dealer, broker, and clearing agency. The US SEC has also sued Binance and Coinbase for similar violations.


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Hassan Mehmood (Saudi Arabia)

Hassan is currently working as a news reporter for Tokenhell. He is a professional content writer with 2 years of experience. He has a degree in journalism.

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