Binance Penalized Up to $3.4 Million by Dutch Central Bank

The Dutch central bank has fined cryptocurrency exchange Binance $3.4 million (3.3 million euros) for operating in the country without registering. Binance received a warning from De Nederlandsche Bank (DNB) in August 2021 for providing services in the nation without the required authorization, which led to the penalty.

Binance received a category three fine, the highest of the DNB’s three levels of enforcement, and was subject to the maximum two-to-four million euro penalties that the bank is permitted to impose. According to a statement from the bank, it received the highest penalty due to the gravity and degree of the culpability of the non-compliance, the agency claims that the breach occurred over a “prolonged period” starting on May 21, 2020, and ending on December 1, 2021. The regulator stated, “This is why DNB considers the non-compliance to be very grave.”

In addition, Binance has enjoyed a competitive advantage because it has not paid any levies to DNB and has not had to incur other costs in connection with ongoing supervision by DNB.

Although the fine was given in April 2022, it was only recently made public. On June 2, 2022, Binance submitted an appeal regarding the penalty. A representative for Binance was quoted in a CNBC story as saying:

While we do not share the same view on every aspect of the decision, we deeply respect the authority and professionalism of Dutch regulators to enforce regulations as they see fit.

The fine is perceived as conflicting with Binance’s recent efforts to improve relations with regulators all around the world after having largely functioned illegally in the past. The exchange recently adjusted its communication style to be in line with regulators, especially in Europe where it has obtained operating permits for France, Spain, and Italy.

Given that Binance had already applied for registration and had been “relatively transparent” about its operations throughout the process, the DNB reduced the punishment by 5%. Binance’s application is still being evaluated by the central bank.

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