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Leading exchange firm Binance is facing a 3M euro charge from the central bank of the Netherlands (DNB) for operating without permission from regulators.
Binance Breaks Dutch Regulatory Requirements
Today, the institution shared a release noting details of the exchange’s violations and the ensuing fine. According to the report, Binance offered crypto services within the jurisdiction without obtaining a license from the DNB. As this is prohibited, the major bank imposed a fine over 2 months ago on the 25th of April.
Notably, before penalizing the exchange, the DNB had issued a public warning to Binance on August 18, 2021. In May 2020, the authorities made it a legal requirement for crypto service providers to first complete registration. This rule came in response to the EU’s anti-money laundering and anti-terrorist financing act.
Higher Charges for Lengthy Violations
Unfortunately, according to the report, Binance failed to comply following the warning and the DNB continued its investigation till December last year. The exchange’s infractions reportedly attract a penalty from the 3rd category. Hence, the administrative fine has a starting value of 2M euros and a maximum amount of 4M.
Binance’s charge is higher than the base amount, and the DNB explained its reasons for this.
To start with, the prolonged length of the platform’s violations caused the bank to increase the fine. The authorities claim Binance’s offenses span about 8 months, from May to December. This is a big part of its concern as the bank claims to take these violations very seriously.
In addition, the Dutch central bank claimed the platform has not paid any fees or incurred any costs tied to regulation. So far, Binance has had an edge over other companies operating within the same region.
Similarly, Binance Holdings’ massive trading volumes are a key factor, scaling 13.7 billion USD according to the bank. In their report, they tagged the exchange as the largest provider of crypto services on the globe. They also pointed out the notable size of the platform’s customer base in the Netherlands.
Binance Finally Complies, Receives A 5% Reduction
At present, the regulators have taken 5% off the Binance penalty. This is, reportedly, because Binance has at last sent in a registration application. Also, it appears the exchange has been forthcoming about relevant information such as its business operations.
The Dutch Central Bank seems moderately satisfied with the process and is reviewing Binance’s newly submitted application. Interestingly, the announcement noted that Binance protested the fine on June 2, 2022.
A Binance spokesperson has commented although they did not confirm if the exchange has paid the charges. According to the representative, the situation marks a long-coming switch in Binance’s interaction with the DNB. They claim to hold respect for the regulators’ authority and professionalism despite not completely agreeing with their decision.
With this now behind us, we can continue pursuing a more traditional operating model in the Netherlands.”