Crypto.com Faces Regulatory Hurdle with Dutch Central Bank Fine

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De Nederlandsche Bank (DNB), the Dutch Central Bank, has imposed a major fine on crypto exchange Crypto.com.

The fine, which amounted to 2.85 million euros ($3 million), was imposed in October last year but only announced on March 13.

The fine was imposed on Foris DAX MT, operating as Crypto.com. The exchange was fined for providing crypto exchange services without proper registration. Additionally, this happened over two years, from May 21, 2020, until at least November 8, 2022. 

The DNB introduced registration requirements on May 21, 2020, under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act, mandating crypto service providers to register.

Crypto.com’s Fine Increased Due to Severity of Violation

The base amount of the fine was set at 2 million euros. However, it was increased due to the severity of the violation and the degree of culpability. 

By operating without registration, Crypto.com enjoyed an unfair advantage over its competitors by evading supervisory fees and compliance costs. 

Additionally, the lack of registration prevented the company from reporting unusual transactions to the Financial Intelligence Unit-Netherlands during the non-compliant period.

Crypto.com objected to the DNB’s decision on October 9, contesting the imposed fine. 

However, the company has since obtained registration in The Netherlands in July 2023. 

The incident follows the DNB’s introduction of registration requirements for crypto service providers in April 2022. 

Binance similarly faced a fine of 3.3 million euros ($3.5 million at the time). The exchange was fined for operating without registration after receiving a warning from the DNB in August 2021. 

In June 2022, Binance announced its decision to cease operations in The Netherlands after an unsuccessful attempt at registration.

Likewise, Coinbase was fined €3.3 million ($3.6 million) by the Dutch Central Bank (DNB) in June last year for failing to obtain the required registration before operating in the jurisdiction. 

Currently, there are 41 registered crypto service providers in The Netherlands. They all adhere to the regulatory requirements set forth by the DNB. 

Crypto.com’s Spot Trading Volume Soars

Crypto.com has experienced a surge in its spot trading volume, surpassing major competitors Kraken and KuCoin.

The exchange’s growing trading volume comes after the platform’s extensive marketing campaign over the past few years. 

The platform even aired an ad during the 2022 Super Bowl, which featured basketball superstar LeBron James with the tagline “fortune favors the brave.”

In 2021, it also launched a $100 million advertising campaign across 20 countries starring actor Matt Damon, inked sponsorship deals, opened a new tab with the Philadelphia 76ers, the Ultimate Fighting Championship, and Formula 1 Racing, and got 20 years of naming rights to the former Staples Center.

Furthermore, the company spent $700 million for the naming rights to the former Staples Center, where the Los Angeles Lakers play. The venue is now officially called Crypto.com Arena.

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