Bybit Fined €2.25M by Dutch Regulator for Non-Compliance

• Bybit faced regulatory sanctions in the Netherlands.
• The DNB €2.25 million for operating without required registration.
• The crypto exchange has six weeks to file an objection to the sanction.

Bybit, a leading cryptocurrency exchange, has been fined in the Netherlands. De Nederlandsche Bank (DNB) has issued a €2.25 million fine to Bybit for providing crypto services without the legally required registration.

In May 2020, the DNB introduced the registration requirement for entities providing crypto services within the Dutch nation. The regulator stated the law was intended to curb the threat of money laundering and terrorist financing associated with cryptocurrency. Despite operating crypto services during this period, Bybit failed to register with the DNB until September 2023.

Notably, the implications of not registering with the regulator meant the DNB could not monitor Bybits operations, making it impossible for DNB to track potentially suspicious transactions that may have passed through the exchange. As a result, Bybit violated The Dutch Prevention of Money Laundering and Terrorism Financing Act (Wwft), a law that is intended to prevent money laundering and terrorist financing.

The Wwft was the legal requirement for companies wanting to operate crypto services in the Netherlands, prior to the Markets in Crypto-Assets Regulation (MiCAR) taking effect on December 30, 2024. MiCAR now requires such companies to obtain a license to operate in the region.

DNB‘s Fine and Bybit’s Response

The DNB‘s fine on Bybit is not statutory. The regulator considered the severity, extent, duration, and culpability of Bybit’s non-compliance to determine an appropriate sanction. Notably, the DNB reduced the originally prescribed fine because of the steps Bybit took to end its non-compliance status. The crypto exchange transferred its Dutch customers to a local partner to prevent further non-compliance.

Meanwhile, should Bybit see any need to object to the DNB sanction, the crypto exchange has six weeks from the sanction date to do so. In the meantime, it is worth noting that the exchange, in its current condition, does not fall short of the DNBs laws and would most likely implement the MiCAR license from December 30 as required.