Registration
Under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft), companies that want to offer crypto services in the Netherlands are required to register with DNB. Previously, DNB issued a public warning regarding Binance on August 18, 2021.
fine
The violations committed by Binance are punishable by a third category fine. This means that the administrative fine has a basic amount of EUR 2,000,000, a minimum amount of EUR 0, and a maximum amount of EUR 4,000,000. DNB’s General Fines Policy has been applied in determining the amount of the administrative fine. The basic amount has been increased due to increased seriousness and culpability.
In the increase of the fine, DNB has taken into account that Binance is the largest provider of crypto services worldwide, with a daily trading volume of USD 13.7 billion, and that Binance has a very large number of customers in the Netherlands. In addition, Binance has enjoyed a competitive advantage because it has not paid any levies to DNB and has not had to incur any other costs related to ongoing supervision by DNB. Another important reason for the increased fine is that the violations have taken place over a long period: from 21 May 2020 (date of introduction of the obligation to register) until at least 1 December 2021 (date of end of investigation by DNB). DNB therefore regards these violations as very serious.
However, DNB has reduced the fine by 5%, partly because a registration application has now been made and because Binance has been relatively transparent about its business operations throughout the process. This registration is currently being assessed by DNB.
The registration obligation
The registration obligation for crypto service providers was introduced on 21 May 2020 because crypto services carry a high risk of money laundering or terrorist financing. This is related to the anonymity associated with crypto transactions. Without this obligation to register, it is less easy to monitor whether the risk of criminal money flows is sufficiently counteracted.
The Wwft aims to combat money laundering of the proceeds of crime and the financing of terrorism. Tackling money laundering is of great importance for effective combating of all kinds of serious crime. After all, concealing the criminal origin of the proceeds of crime enables perpetrators of these crimes to stay out of the reach of investigative authorities and to enjoy the accumulated wealth undisturbed.
Because Binance has offered crypto services in the Netherlands without registration with DNB, Binance has thwarted the objectives of the Wwft. For example, Binance cannot report unusual transactions to FIU-NL. As a result, a large number of unusual transactions may remain hidden from the investigative authorities.
Objection
Binance objected to the fine on June 2, 2022.
Update August 4, 2022:
On July 27, 2022, Binance withdrew the appeal. The fine has thus become irrevocable.
More information
Read below the decision to impose an administrative fine, with the exception of confidential information. For further information, please contact DNB’s Information Desk: 0800 – 020 1068 (free)