"Coinbase faces €3.3M fine from the Dutch central bank for retroactively penalizing unregistered users"

The cryptocurrency exchange Coinbase, headquartered in San Francisco, was fined 3.3 million euros, approximately 3.6 million US dollars, by the Dutch central bank DNB for violating anti-money laundering and counter-terrorism financing AML/CTF regulations.

According to DNB's statement, Coinbase provided services to Dutch users before successfully registering with DNB on September 22, 2022. Therefore, it was non-compliant at least from November 2020 to August 2022. DNB began urging operators to register as early as 2020.

In July of last year, DNB also fined Binance 3.3 million euros for the same reason of being "unregistered" during the period from May 2020 to December 1, 2021, giving the exchange an advantage over other registered competitors.

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Both Binance and Coinbase have stated that they will appeal DNB's fines. Binance later established a physical entity, Binance Nederland BV, in the Netherlands to facilitate compliance.

The fines from DNB indicate its intention to hold overseas operators accountable for past responsibilities.

The Dutch Central Bank Focuses Only on Anti-Money Laundering, Overseas Platforms Still Need to Register with the Government

The DNB stated that they will only oversee whether cryptocurrency service providers comply with AML/CTF regulations, but they will not supervise financial business risks. The Dutch financial market regulator AFM also does not oversee these operators. Therefore, there is no specific protection for cryptocurrency consumers, only general consumer protection.

Taiwan Only Regulates Domestic Operators

After the FTX incident, the Financial Supervisory Commission of Taiwan was repeatedly asked whether they would regulate cryptocurrency operators, however, the chairman of the commission cited the reason of overseas institutions being out of their jurisdiction and stated that investors should evaluate risks on their own. They only regulate domestic registered operators in accordance with the "Regulations for Anti-Money Laundering and Countering the Financing of Terrorism for Virtual Currency Platforms and Trading Businesses".

Compared to the DNB's enforcement actions against service providers serving domestic customers, the approach is different.