Crypto.com, a popular crypto trading platform, has recently been hit with a substantial fine of €2.85 million ($3.1 million) by the Netherlands Central Bank. The penalty was imposed on Crypto.com’s Dutch trading entity, Forix DAX Mt, for operating within the European country without proper registration for a period of two years. This violation of Dutch regulations highlights the importance of adhering to local laws and guidelines when conducting business in a specific region.
The Netherlands requires crypto firms to register with the De Nederlandsche Bank (DNB) under the Anti-money Laundering and Anti-Terrorist Financing Act in order to operate within the country legally. Despite Crypto.com’s significant presence in the Netherlands, the platform had failed to register with the authorities, leading to the severe penalty imposed by the Apex Bank. The extended period of noncompliance and evasion of regulatory fees gave Crypto.com an unfair competitive advantage, according to the regulator.
Penalty and Response
The fine of €2.85 million not only serves as a financial setback for Crypto.com but also tarnishes its reputation in the eyes of regulators and customers. The DNB emphasized the seriousness of the violation, citing the prolonged period of noncompliance as a key factor in determining the amount of the fine. Additionally, Crypto.com’s large customer base in the Netherlands further exacerbated the situation, making it imperative for the platform to rectify its regulatory shortcomings.
Industry Precedent
This incident is not isolated, as other major crypto platforms like Binance and Coinbase have also faced penalties for operating in the Netherlands without proper registrations. The regulatory crackdown on noncompliant crypto entities underscores the importance of regulatory compliance and adherence to local laws in the rapidly evolving crypto landscape. The exit of Binance from the country following its fine serves as a stark reminder of the consequences of flouting regulatory requirements.
Despite the imposed fine, Crypto.com has taken steps to address the issue by lodging an appeal against the penalty. The platform’s registration with the Apex Bank last July demonstrates its commitment to rectifying its regulatory oversights and aligning with local regulations. As one of the 40 licensed crypto entities in the country, Crypto.com aims to regain trust and compliance with Dutch regulatory authorities moving forward.