Binance has been fined 3.3 million euros ($3.4 million) by the Dutch Central Bank for providing unauthorized services to Dutch nationals.
Despite not being properly registered, the cryptocurrency exchange kept on offering its services. The exchange’s effort to influence European authorities has suffered a blow as a result of this.
The Central Bank said that the cryptocurrency exchange had broken the regulations that the digital asset firm required to follow in order to obtain a registration that would allow the exchange to provide services in the Netherlands.
The De Nederlandsche Bank (DNB) used its general fine-setting policy to estimate the amount that was imposed.
Furthermore, the exchange served a large number of users in the Netherlands, which led the Dutch Central Bank to charge the exchange extra fees.
The regulatory authority had declared that these offenses committed by the cryptocurrency exchange were subject to a third category penalties, therefore the basic administrative charge was €2 million ($2.03 million).
Enhanced Penalty on Binance Given The Size Of The Customer Base
However, the DNB increased the punishment imposed on the exchange and gave many justifications for doing so. The DNB cited the crypto exchange’s position as the nation’s largest service provider, which allows it to serve a sizable clientele, as the main justification.
DNB’s statement appeared in the press release and read,
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
Since May 21, 2020, the Dutch Central Bank has mandated that virtual asset service providers (VASPs) register in accordance with the Anti-Money Laundering and Anti-Terrorist Financing Act.
The cryptocurrency exchange was hit with this punishment in the month of April 2022.
A public warning was issued last year against the bitcoin exchange following the levying of the charge.
Binance decided to challenge the sanction, according to a statement from DNB
According to a cryptocurrency exchange spokeswoman, this represents a “pivot in our continuous relationship” with the DNB. According to the exchange’s spokeswoman, Binance Netherland BV is a local corporate branch that has been established by the exchange.
In addition, the representative said
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.
In accordance with documents filed with the Dutch Chamber of Commerce, Binance Nederland BV was founded in October. Since December 2021, Binance Holding Ltd. of Ireland has owned Binance Nederland BV.