Dutch Authorities Imposes €2.2 Million Fine on Bybit

The Dutch Central Bank has fined Bybit, a cryptocurrency exchange based in Dubai, for operating in the country without the required registration. This broadens the range of comparable regulatory concerns that digital asset platforms encounter worldwide.

Mandatory registration with the De Nederlandsche Bank (DNB) is a crucial prerequisite for crypto service providers operating in the Netherlands. However, Bybit was penalized because it did not satisfy this responsibility.

Bybit Slammed With €2.2 Million Penalty

According to a post on the DNB’s official website, on May 21, 2020, the country implemented a registration requirement for service providers involved in cryptocurrency. The registration aids the nation in combatting the significant risk of money laundering and other criminal charges associated with crypto services, such as financing terrorism.

DNB pointed out that it becomes challenging to determine whether the danger of illicit financial flows is sufficiently mitigated in the absence of proper registration. Bybit violated the purpose of the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) by neglecting to register.

Furthermore, this implies that Bybit failed to notify the Financial Intelligence Unit – Netherlands (FIU-NL), the financial watchdog, of “unusual transactions,” allowing a number of these anomalous transactions to elude detection by the authorities.

DNB revealed that the seriousness of the infraction determines the enforcement strategy it will use. Because of the seriousness, scope, length, and extreme culpability of the infraction, Bybit was fined €2.2 million.

Notably, the DNB revealed that Bybit had already taken action to terminate the non-compliance and stop it from happening again by moving its Dutch customers to a local partner, therefore the total penalty amount was lowered. DNB emphasized that Bybit has just six weeks from the date of receipt to challenge the decision.

Bybit Responds, Acknowledges Violation

The cryptocurrency exchange, meanwhile, has admitted to the infraction and the penalty levied by the authorities. Bybit reiterated its dedication to adhering to Dutch regulatory norms in a press release earlier today.

Ben Zhou, Bybit’s co-founder and CEO, commented on the matter and emphasized the company’s efforts towards “responsible growth.”

“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,” he said.

Finally, he underlined the company’s dedication to offering clients in the Netherlands safe, and reliable services while it pursues its strategic expansion plan throughout Europe.

Conclusion

The Dutch Central Bank’s fine against Bybit for operating without proper registration highlights the strict regulatory landscape that cryptocurrency exchanges face, particularly in Europe. Bybit’s €2.2 million penalty underscores the importance of compliance with anti-money laundering and anti-terrorism financing laws, as regulators continue to prioritize financial transparency and crime prevention in the digital asset space.

While Bybit has acknowledged its infraction and taken steps to transfer its Dutch customers to a compliant local partner, the incident serves as a reminder of the serious consequences exchanges face if they bypass local regulatory requirements. Bybit’s response, emphasizing its commitment to working with European regulators, indicates a proactive shift towards greater transparency and adherence to local laws, which could benefit its long-term reputation in the region.