The Netherlands’ financial regulator has fined crypto exchange Coinbase $ 3.6 million for various violations including offering services without a license. In a press release that announced Coinbase’s $1.3 million fine in July, the Dutch government reaffirmed its commitment to “supervise the virtual currency sector and protect the interests of consumers”.
On December 9th, this commitment was further demonstrated by the Netherlands Authority for the Financial Markets (AFM)’s decision to impose a $3.6 million fine on Coinbase. The regulator’s investigation found a long list of issues, ranging from providing services without an AFM license to mismanagement of customer funds. In particular, Coinbase was found to have actively engaged in activities such as exchange services and custody services without the proper AFM authorization. It also received a fine for failing to properly report customer complaints and for inadequately managing customer funds.
The AFM further stated that Coinbase had inadequate policies and procedures for the safekeeping of customer funds and that it had failed to enforce customer identification measures due to the lack of adequate customer due diligence.
The fine is the largest to date given to a crypto exchange in the Netherlands. It is a reminder to all crypto exchanges within the country that they are required to comply with the regulations. Coinbase was also required to pay €20,000 to the AFM’s investigation and research fund. In a statement, Coinbase said it “worked constructively with the AFM throughout their investigation” and noted that it had already implemented changes and improvements to the company’s compliance program since the events leading up to the investigation. The AFM has stated that it expects the crypto industry to respect the interests of consumers and investors, and the fine imposed on Coinbase should serve as a reminder of that expectation.
Other crypto exchanges and services operating in the Netherlands should take note and ensure that all AFM rules and regulations are properly implemented and followed.
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