Finance

"Dutch Regulator Fines Crypto.com $3.1 Million for Operating Without a License"

The Dutch Central Bank (DNB) announced on March 13th the imposition of a $3.1 million fine on Crypto.com for conducting business without the requisite license. The regulatory authority penalized the cryptocurrency exchange for its unauthorized operations, highlighting the stringent oversight within the Netherlands' financial landscape.

Crypto.com, known locally as Foris DAX MT, reportedly provided services from May 2020 to November 2022 without obtaining the necessary licensing. Following a decision made on October 3rd, 2023, the entity was fined €2.85 million (approximately $3.1 million), underscoring the serious nature of the violation.

Under Dutch law, companies engaging in financial services must register with the DNB to comply with anti-money laundering and counter-terrorism financing regulations. While the base penalty for such an infringement is €2 million, the fine was escalated due to "the severity and degree of culpability" attributed to Crypto.com's operations.

In determining the fine, the DNB considered the extensive customer base serviced by DAX MT, and pointed out the unfair competitive advantage the platform gained by evading supervisory fees over an extended period. The regulator emphasized the critical importance of adherence to the regulatory framework to ensure a level playing field and protect the integrity of the financial system.

Crypto.com was given until November 13th, 2023, to address the violations and file any objections. This action underscores the DNB's commitment to enforcing compliance among trading platforms operating within its jurisdiction.

This case is part of a broader regulatory trend in the Netherlands, with other platforms such as Binance and Gemini also facing scrutiny. Binance exited the Dutch market in June 2023 following an unsuccessful attempt to acquire a VASP license, and Gemini suspended its operations in November due to regulatory challenges, marking a significant moment for regulatory enforcement in the rapidly evolving cryptocurrency sector.

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