The Dutch Central Bank has fined Binance €3.3 million ($3.4 million) as the crypto exchange was providing its services in the Netherlands without the required registration.
Per the statement, Binance was originally hit by an administrative fine of a €2 million base amount. However, the DNB said the penalty was increased as the exchange benefited from lower costs because it hadn’t paid registration fees and other regulatory charges, unlike its competitors.
The Dutch central bank also cited Binance’s large client base in the country and its huge trading turnover as additional reasons to hike its fine. Overall, the cryptocurrency exchange was not in compliance with anti-money laundering or anti-terrorism financing legislation in the Netherlands.
To encourage regulated business within the crypto industry, the country adopts a licensing scheme for digital assets services after the amendment it introduced two years ago to the EU’s Money Laundering Directive. The Dutch government also introduced a raft of new regulations, including tougher KYC rules for digital currency transactions. The authorities want to prevent anonymity in cryptocurrency transactions thereby placing a ban on anonymous crypto accounts.
Binance takes compliance very seriously and is in the process of submitting an application for the required registration, a Binance spokesperson said.
The representative further stated, “While we do not share the same view on every aspect of the decision, we deeply respect the authority and professionalism of Dutch regulators to enforce regulations as they see fit. With this now behind us, we can continue pursuing a more traditional operating model in the Netherlands.”
Regulators in Britain, Germany, Hong Kong and Italy have earlier voiced similar concerns and have stepped up pressure on Binance. However, the world’s largest crypto ecosystem has recently secured many approvals in European countries.
Most recently, the Bank of Spain approved Binance’s Spanish subsidiary, Moon Tech Spain, to act officially as a recognized virtual asset service provider (VASP) in the country. The exchange also secured a regulatory nod to operate in Italy and registered its services with the dual regulatory structure in France.
Earlier this year, Changpeng Zhao (CZ), founder and CEO of Binance confirmed that they are in talks with Germany’s regulators to secure a local crypto license. The move marked the first time a major ‘unregulated’ exchange has made a move toward such a coveted licence in Europe’s largest economy.
The recent approvals would boost Binance’s ambitions in Europe after it has been on shaky ground last year, with regulators in the UK and elsewhere putting the exchange under intense scrutiny.