The Central Bank of the Netherlands has also issued an official warning against Binance.
After the one issued by the Italian Consob last month, now comes the one from De Nederlandsche Bank (DNB), which announces that Binance is providing cryptocurrency services in the Netherlands without the required registration with DNB.
That means that the exchange is found not to comply with Anti-Money Laundering (AML) and anti-terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme, WWFT) regulations.
DNB’s official announcement explicitly states:
“[Binance] is illegally offering services for the exchange between virtual and fiduciary currencies and it is illegally offering custodian wallets.”
According to the bank, this attitude could increase the risk of customers being involved in money laundering or terrorism financing.
By the way, DNB also publishes a register of cryptocurrency service providers legally authorized in the Netherlands on its website dnb.nl, and among them, Binance is not listed.
While the warning of the Italian Consob concerned only derivatives products, then limited in Italy by Binance, this one also concerns the whole cryptocurrency activity of the exchange in the Netherlands.
The two countries, in fact, although they both belong to the EU and the Eurozone, have different regulations regarding financial service providers, so if in Italy no authorization is required to operate as a cryptocurrency exchange, in the Netherlands it is, and Binance does not have it.
So DNB’s warning has value only with regards to providing cryptocurrency services to Netherlands residents, but theoretically, it could also impact all other markets.
What Binance risks in the Netherlands
In fact, Binance now risks having its site blocked in the Netherlands if it fails to comply with local regulations. To do so, it would have to obtain authorization to operate, but it won’t be easy to receive it in the short term. Therefore it is plausible that it could even be forced to temporarily close all its services for Dutch customers until it gets the license to operate in the country.
To tell the truth, it doesn’t seem that Binance will have real problems obtaining such a license, but the timing will hardly be short.
Therefore, it is plausible that the company will be forced to take measures before waiting for the authorization to operate legally in the Netherlands. Still, at this moment, it is not yet clear what actions it will take.
For the US market, for example, it had to create a second site, Binance.US, explicitly designed to provide services to Americans following the law. However, it seems unlikely that it will do the same for the Dutch market, which is far inferior in terms of clients and trading volumes.