The Dutch central bank De Nederlandsche Bank (DNB) has disclosed that it fined Crypto.com for operating without proper registration for a period exceeding two years. Although the penalties were imposed in October, the announcement was made public only on March 13, raising questions about the timing of the revelation and the reasons for the delay in disclosure.
On October 23, the DNB imposed a fine of €2.85 million ($3 million at the time) on Foris DAX MT, trading under the name Crypto.com, for its failure to conduct transactions between May 21 and at least November 21, 2020, without being registered to provide crypto services. Notably, registration requirements were introduced by the DNB on May 21, 2020, making compliance mandatory for cryptocurrency service providers.
Under the Dutch Anti-Money Laundering and Counter-Terrorism Financing Act, cryptocurrency service providers are obligated to register with the DNB. The fine levied against Crypto.com exceeded the base amount of €2 million due to the severity of the violation and the level of responsibility attributed to the company. The lack of registration hindered Crypto.com's ability to report unusual transactions to the Dutch Financial Intelligence Unit during the specified period, despite having a substantial number of customers.
Crypto.com contested the DNB's decision on October 9, but ultimately registered in the Netherlands in July 2023. Despite the regulatory breach, Dutch users were legally permitted to use the exchange, according to a DNB spokesperson. In response to the fines announced on March 13, a spokesperson for Crypto.com reassured that the penalties pertained to past incidents, which had been rectified, and would not impact the platform's ongoing operations or services.
The DNB had introduced registration requirements for crypto service providers in April 2022, following which Binance faced a penalty of €3.3 million ($3.5 million at the time) in August 2021 for operating without proper registration. Subsequently, Binance announced its decision to cease operations in the Netherlands in June 2022 after encountering difficulties in meeting the registration criteria. Presently, there are 41 registered cryptocurrency service providers in the Netherlands, complying with the regulatory framework set forth by the DNB.
