Bybit Fined for Operating Without Dutch Registration

Bybit, a prominent cryptocurrency exchange, has been penalized with a €2.25 million fine by De Nederlandsche Bank (DNB) for operating without the necessary legal registration in the Netherlands.

The DNB had implemented a registration requirement in May 2020, aimed at combating money laundering and terrorist financing in the crypto sector. Despite this regulation, Bybit continued its operations without registering until September 2023.

The lack of registration meant that the DNB was unable to oversee Bybit’s activities, raising concerns about the potential for suspicious transactions to go unchecked on the exchange.

This violation falls under The Dutch Prevention of Money Laundering and Terrorism Financing Act (Wwft), which governs crypto service providers in the Netherlands prior to the upcoming Markets in Crypto-Assets Regulation (MiCAR), which takes effect on December 30, 2024. MiCAR will require crypto firms to obtain licenses to operate in the region.

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The DNB’s decision to fine Bybit was influenced by the nature and duration of its non-compliance. However, the regulator did reduce the fine due to Bybit’s actions to rectify its situation, including transferring its Dutch customers to a local partner.

Bybit has six weeks from the date of the sanction to contest it if it chooses. Currently, the exchange appears to comply with DNB regulations and is expected to implement the MiCAR licensing requirements as mandated.

Alexander Stefanov