Bybit Fined €2.2 Million by Dutch Central Bank For Operating Without Registration

Dubai-based cryptocurrency exchange Bybit has received a fine from the Dutch Central Bank for operating in the country without proper registration. This adds to the pool of similar regulatory issues faced by digital asset platforms globally.

One key requirement for crypto service providers in the Netherlands is mandatory registration with the De Nederlandsche Bank (DNB). However, Bybit failed to fulfill this obligation, hence the penalty.

Bybit to Pay €2.2 Million Fine

According to a post on the DNB website, the registration requirement for crypto-related service providers was introduced in the country on 21 May 2020. The registration helps the country counter the high risk of money laundering and other criminal offenses, like terrorist financing, related to crypto services.

DNB noted that without proper registration, it becomes difficult to check if the risk of criminal financial flows is adequately countered. By failing to register, Bybit went against the objective of the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft).

Moreover, this suggests that Bybit was unable to report “unusual transactions” to the financial watchdog, the Financial Intelligence Unit – Netherlands (FIU-NL), hence, allowing several of these abnormal transactions to go unnoticed by the authorities.

DNB disclosed that it chooses its enforcement approach based on the gravity of the violation. Therefore, the €2.2 million fine imposed on Bybit is a result of the severity, extent, duration, and severe culpability of the violation.

Notably, the DNB disclosed that the final sum of the penalty was reduced because Bybit had already taken steps to end the non-compliance and prevent reoccurrence by transferring its Dutch customers to a local partner. Ultimately, DNB stressed that Bybit has only six weeks from the date of receipt to object to the decision.

Bybit Acknowledges Violation

Meanwhile, the crypto exchange has acknowledged the violation and the fine imposed by the authorities. In a press release earlier today, Bybit reaffirmed its commitment to following regulatory standards in the Netherlands.

Commenting on the issue, the co-founder and CEO of Bybit, Ben Zhou, stressed on the company’s effort on “responsible growth.” He said;

“Since our partnership with SATOS, we have operated fully within the regulatory framework. Currently Bybit Powered by Satos is growing into the number two exchange in the market with 10 million users.”…”At Bybit, we remain committed to working closely with European regulators to build a responsible and transparent ecosystem.”

Lastly, he emphasized the company’s commitment to providing secure, reliable services to customers in the Netherlands as it continues its strategic expansion plan across Europe.