Coinbase, one of the popular cryptocurrency exchanges, has been fined $3.6 million from the Dutch Central Bank (DNB). Here are the reasons behind the penalty and other details…
Million-dollar penalty to cryptocurrency exchange
According to a January 26 report by Reuters, the Dutch Central Bank (De Nederlandsche Bank (DNB)) fined cryptocurrency exchange Coinbase 3.3 million euros ($3.6 million) for failing to comply with local regulations for financial service providers. gave. The exchange reportedly failed to obtain the necessary permission to offer services in the Netherlands before starting operations in the country. DNB said it takes into account the size of Coinbase as a company and the fact that it has a “significant number of clients in the Netherlands.” Authorities claimed that Coinbase failed to comply with the law in the period between November 2020 and August 2022.
Coinbase’s (COIN) share price is expected to react to the news as soon as the US market opens for trading on Thursday morning. As it is known, Coinbase is traded on the US stock exchanges and the markets are closed in the country yet. Currently, the price of COIN is marginally down from $52.76 to $50 yesterday, down a significant 1.48 percent. It still manages to stay above $50. As it is known, the stock market was opened to the public in April 2020.
Coinbase experienced a slight increase in trading volume
Meanwhile, as we reported, the average daily volume (ADV) on Coinbase so far in January was $1.6 billion, up 0.3 percent from the previous quarter. By comparison, other U.S. exchanges like Kraken and Gemini saw drops of 13 percent and 46 percent, respectively, according to JPM data. Coinbase’s slight increase in trading volume marks a change of direction, given that the exchange sees a continued decline in volume in 2022.
“We believe Coinbase has had a reputation for some time as a well-respected, reliable broker,” JPMorgan analysts said. “We think reputation has helped increase market share as activity levels recover.” Coinbase’s competitors, including Binance and Gemini, are grappling with the ripple effects of FTX’s collapse, which has triggered increased scrutiny on unregulated exchanges in the industry.
It makes Coinbase one of the few options for investors to trade crypto without the significant risk of fraud. “Unlike some of Coinbase’s high-profile peers, Coinbase was not directly exposed to FTX and isolated from the direct legal and reputational repercussions of its collapse,” JPM wrote. cryptocoin.com As we have also reported, Coinbase is among the FTX creditors announced yesterday. In addition to Coinbase, huge companies such as Apple, Microsoft and Netflix are among the creditors.
