Central Bank Fines Crypto.com for Registration Violations

The central bank of The Netherlands, De Nederlandsche Bank (DNB), has fined Crypto.com for operating without registration for over two years. The fine, which amounted to 2.85 million euros ($3 million at the time), was imposed in October but only announced on March 13. It is unclear why the fine was not made public sooner or why it is being announced now.

The DNB imposed the fine on Foris DAX MT, also known as Crypto.com, for providing crypto services without registration from May 21, 2020, to at least November 8, 2022. The registration requirement was introduced by the DNB on May 21, 2020, and all crypto service providers are obligated to register under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act.

The base amount of the fine was 2 million euros, but it was increased due to the severity of the violation and the level of culpability exhibited by Crypto.com. During the period of non-compliance, the company had a significant number of customers and was unable to report unusual transactions to the Financial Intelligence Unit-Netherlands due to its lack of registration. This gave Crypto.com an unfair advantage over its competitors as it avoided paying supervisory fees and compliance costs.

Crypto.com filed an objection to the DNB’s decision on October 9 and received registration in The Netherlands in July 2023. A spokesperson for the company stated that Dutch users were legally allowed to use the exchange even though it was operating illegally at the time.

According to the spokesperson, the imposed fine relates to a past incident that has already been rectified. They assured that it does not impact their current operations or services, as they have already addressed the concerns raised in a timely and transparent manner.

The DNB introduced registration requirements for crypto service providers in April 2022, and Binance, another major crypto exchange, was also fined for operating without registration. Binance received a warning from the DNB in August 2021 and was subsequently fined 3.3 million euros ($3.5 million at the time). The company announced its decision to cease operations in The Netherlands in June 2022 after failing to register.

Currently, there are 41 registered crypto service providers operating in The Netherlands, complying with the DNB’s regulations.