Coinbase is the leading cryptocurrency exchange in the UK. The Netherlands Central Bank (DNB) has just imposed a penalty of 3.3 million Euros (3.6 million US dollars) for failing to obtain a proper application for registration before the Netherlands provides encryption services. DNB indicated that it has fully considered that Coinbase is one of the largest cryptocurrency trading companies and has a large number of customers in China in Northwestern Europe.

Coinbase was punished by the Dutch Central Bank

The authorities claimed that the centralized exchange did not comply with the requirements during the period from November 2020 to August 2022. In addition, according to the Dutch Compliance Management and Anti-Terrorism Financing Act, enterprises operating in the Netherlands or preparing to provide encryption-related services must first apply for registration with DNB.

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On May 21, 2020, the Central Bank required that encryption exchanges and encryption service providers should apply to the government departments for registration to comply with the regulations. This is because the threat of money laundering and terrorist financing related to encryption service projects has increased - due to the following group polarization.

The report quoted the Dutch Central Bank as saying:

Coinbase has the core competitiveness because he has not paid all the control expenses to DNB, nor has he borne other incidental expenses related to DNB's regular regulatory activities.

In addition, the central bank announced that the exchange had previously violated the order objectives, operated in the Netherlands, and provided cryptocurrency service projects without applying for registration with DNB. Therefore, Coinbase cannot report abnormal transactions to the financial industry intelligence agency of the host country within the non-standard period, and will not be able to report before September 22, 2022. The immediate consequence is that the investigation authorities are likely to miss many unusual transactions during this period.

The increasingly serious legal risk of Coinbase

It is noteworthy that the industrial practice of Coinbase has already attracted the attention of the government, regulatory departments and authorities. Earlier that month, Coinbase Global Inc. and the New York City Financial Industry Service Center (NYDFS) reached a settlement with a total amount of $100 million. According to a statement released by NYDFS, the organization noted that Coinbase regarded its entry requirements for consumers as a "simple check box" and did not carry out the corresponding back tone.

Coinbase now also has time to file a lawsuit against the proposed penalty to the Dutch Central Bank before March 2. It is estimated that the share price of Coinbase (COIN) will take action on this news after the opening of foreign markets on Thursday morning. From the current situation, the price of COIN is slightly higher than the price of US $50, at US $52.76, which continued to fall by 1.48% yesterday.