Binance is the world’s largest crypto exchange by trading volumes. However, the growth of this exchange has not been without hiccups, as several regulatory bodies have issued complaints of Binance operating without the necessary regulatory requirements.
The exchange was recently hit with a $3 million fine by the Dutch Central Bank. The institution said Binance was operating illegally in the country after failing to meet the registration requirements.
Binance faces a $3M fine
The Dutch Central Bank has imposed a $3.35 million file on Binance Holdings. The exchange will impose the fine for offering local cryptocurrency services while not obtaining regulatory approval.
The central bank said the fine was imposed in April this year, adding that Binance Holdings must register with the central bank and comply with the Money Laundering and Terrorist Financing Prevention Act. According to the central bank, the exchange received a public warning on its unauthorized operations in August last year.
The central bank also provided a list of the factors that had prompted the regulator to impose the heavy fine on Binance. It pointed to the exchange’s large trading volumes, adding that many users in the Netherlands used Binance to buy Bitcoin and other cryptocurrencies.
The penalty also charged Binance for prolonged violations of the local registration requirements. The central bank said that the violation period started in May 2020, when the central bank mandated the exchange to comply with the local registration, until December 2021, when the central bank halted its investigations into the exchange.
The regulator also said the fine had been reduced after the exchange started a registration application to obtain a license to operate in the Netherlands. The Dutch central bank said that the exchange had maintained transparency in its operations throughout the registration process. On June 2, Binance had objected to this fine.
Binance’s global expansion
The exchange is the largest exchange globally by trading volumes. However, amid this expansion, the exchange has faced increased regulatory scrutiny. Binance’s daily average trading volumes are around $15 billion, significantly higher than any other crypto exchange.
The recent fine put a dent in the efforts made by Binance to achieve regulatory clarity globally. The exchange has already received regulatory approval from France, Italy, and Spain in Europe. The exchange is also looking to set up a headquarter office to ease regulations.
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This article was written for Business 2 Community by Ali Raza.
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