The Dutch Central Bank has imposed a 3.3 million euros ($ 3.4 million) fine on Binance for extending unauthorised services to Dutch citizens.
The crypto exchange did not have proper registration but still continued to provide services. This comes as a setback to the exchange’s campaign to win over the European regulators.
The Central Bank stated that the crypto exchange had violated the rules which was needed by the digital asset company to be able to have a registration that would facilitate the exchange to offer services in Netherlands.
To form an estimate of the fine that was levied, the De Nederlandsche Bank (DNB) followed its General Fine Setting Policy.
Additionally, the exchange has served a high number of users in Netherlands which made the Dutch Central Bank levy additional fees on the exchange.
The regulatory body had stated that these violations that the crypto exchange carried out was punishable by a third category fine which meant that the base administrative fine amounted to €2 million ($ 2.03 million).
Increased Fine On Binance Due To Its Large Customer Base
The fine imposed on the exchange has however been hiked as the DNB cited different reasons for doing so. The primary reason according to the DNB was that the crypto exchange happens to be the largest provider of services which is why it caters to a large number of customers across the country.
In the press release, DNB’s statement stated,
In addition, Binance enjoyed a competitive advantage because it did not pay any levies to DNB and did not incur any other costs related to ongoing supervision by DNB
The Dutch Central Bank need virtual asset service providers (VASPs) to be registered under the Anti-Money Laundering and Anti-Terrorist Financing Act since May 21, 2020.
This fine was issued against the cryptocurrency exchange in the month of April 2022.
After the issuance of the fine, a public warning was issued against the cryptocurrency exchange last year. DNB also mentioned in a statement that Binance had chosen to appeal against the fine.
Binance Has Set Up A Local Company Branch In Netherlands
A spokesperson from the crypto exchange mentioned that this is marked a “pivot in our ongoing collaboration” with the DNB. The spokesperson has stated that the exchange has set up a local company branch which is called the Binance Netherland BV.
Furthermore, the spokesperson mentioned,
With this now behind us, we can continue pursuing a more traditional operating model in the Netherlands. The DNB said it has not yet approved Binance’s registration but it had lessened the fine it had originally intended by 5% because the company has “been relatively transparent about its operations throughout the process.
Binance Nederland BV was established in October according to Dutch Chamber of Commerce filings. Binance Nederland BV has been owned by Binance Holding Ltd of Ireland since December of 2021.
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Featured image from NDTV.com, chart from TradingView.com