In a significant regulatory move, the Dutch Central Bank (DNB) has imposed a fine on cryptocurrency exchange Bybit for failing to register in accordance with local laws aimed at combating money laundering and terrorist financing. The registration requirement, introduced in May 2020, was designed to enhance oversight in the crypto sector, yet Bybit continued its operations without registration until September 2023.
The absence of registration meant that the DNB was unable to monitor Bybit’s activities effectively, raising alarms about the potential for unregulated and suspicious transactions on the platform. This non-compliance falls under The Dutch Prevention of Money Laundering and Terrorism Financing Act (Wwft), which governs crypto service providers in the Netherlands. This regulation is set to evolve with the upcoming Markets in Crypto-Assets Regulation (MiCAR), which will require crypto firms to secure licenses to operate in the region beginning December 30, 2024.
The DNB’s decision to fine Bybit was influenced by the nature and duration of its non-compliance. However, the regulator acknowledged the exchange's efforts to rectify its situation, including transferring its Dutch customers to a local partner, which led to a reduction in the fine amount.
Bybit now has six weeks from the date of the sanction to contest the fine if it chooses. In the wake of these developments, the exchange appears to be taking steps to align with DNB regulations and is expected to meet the licensing requirements set forth by MiCAR when it comes into effect.
The situation underscores the growing emphasis on regulatory compliance in the cryptocurrency sector, particularly as governments and financial authorities worldwide seek to establish clearer frameworks for oversight. Bybit's experience serves as a reminder for other crypto firms operating in Europe to prioritize compliance and prepare for the upcoming regulatory changes.
As the crypto landscape continues to evolve, the DNB's actions reflect a commitment to ensuring that exchanges operate within legal parameters, safeguarding the financial system against potential risks associated with illicit activities.
November 2024, Cryptoniteuae