Dutch Central Bank Imposes Over $3M Fine on Binance for Offering Services to Dutch Citizens without Required License

Dutch Central Bank Imposes Over $3M Fine on Binance for Offering Services to Dutch Citizens without Required License

Tolu Ajiboye By Tolu Ajiboye Updated 3 min read
Dutch Central Bank Imposes Over $3M Fine on Binance for Offering Services to Dutch Citizens without Required License
Photo: De Nederlandsche Bank

Binance has received a fine from the Dutch governing bank for violating its Money Laundering and Terrorist Financing Prevention Act.

The Dutch Central Bank (DNB) has awarded leading crypto exchange Binance a 3.3 million euro ($3.35 million) fine for offering its services to Dutch citizens without a license. The bank explains that the Changpeng Zhao-led exchange does not have the required permission to offer its services in the Netherlands.

The central bank issued the fine against Binance in April after earlier sending a public warning to the crypto exchange back in August 2021. De Nederlandsche Bank mandates that all virtual asset service providers (VASPs) complete registration under its Money Laundering and Terrorist Financing Prevention Act. The DNB also stated that Binance had benefited from a competitive advantage over companies that actually possessed the required registration. According to the Dutch Central Bank, this period was at least between May 2021 and the beginning of December last year.

Binance to Appeal Dutch Central Bank Fine

The premier Dutch bank said that Binance indicated in June that it plans to appeal the fine. According to an email reaction from a spokesperson representing the crypto exchange, the fine marks a pivot in Binance’s “ongoing collaboration” with the DNB. In addition, the spokesperson also stated that Binance has since established a local company branch, Binance Nederland BV. The spokesperson said:

“With this now behind us, we can continue pursuing a more traditional operating model in the Netherlands.”

However, neither the spokesperson nor the DNB provided any insight on the location of Binance Holdings Ltd in the country.

The DNB initially increased the imposed fine from 2 million euros to a 4 million maximum because of Binance’s large customer base in the Netherlands. However, although it is yet to approve the exchange’s registration, the bank later revealed that it had lessened the fine. The DNB reduced the fine by 5% because Binance has “been relatively transparent about its operations throughout the process.”

Binance European Stride

Binance also stated that it recently received regulatory approval in several European countries, including France, Italy, and Spain. This implies that the world’s largest exchange by trading volume can now custody digital assets in these countries. In addition, Binance is now eligible to operate trading platforms in these countries. At the time, the exchange’s founder Zhao commented on Binance’s regulatory approval in France and the other qualified countries, saying:

“When we first started, we wanted to embrace the decentralized philosophy of no offices, no headquarters, no corporate entities. As soon as you want to get licenses, you have to have the traditional structures, which we do now.”

Prior to its approval in Europe, Binance also secured provisional regulatory approval to operate in Abu Dhabi.

The UK’s Financial Conduct Authority (FCA) issued Binance a consumer warning in June 2021. At the time, the FCA expressed concerns that it might be impossible to properly supervise Binance. The authority said oversight would be difficult because of Binance’s “complex and high-risk financial products”. The watchdog also described these products as risky to customers.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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