Bybit Fined $2.4M by Dutch Central Bank Over Violations

The Netherlands’ central bank, De Nederlandsche Bank (DNB), has fined crypto exchange Bybit €2.2 million ($2.4 million) for operating without mandatory registration. A regulatory requirement under the country’s Anti-Money Laundering and Anti-Terrorist Financing Act. The fine, announced on Oct. 22, reflects the bank’s commitment to enforcing compliance with regulations designed to combat money laundering and terrorist financing.

DNB’s investigation found that Bybit had failed to register its crypto services. A process mandated in May 2020 to help authorities monitor and prevent illicit financial activities. This lack of registration, according to DNB, not only contravened regulatory standards but also limited Bybit’s ability to report suspicious transactions. An essential component of anti-money laundering (AML) efforts.

Bybit’s Compliance Efforts and Reduced Fine

In determining the fine, DNB considered the severity and duration of Bybit’s non-compliance. The initial penalty was slightly reduced due to Bybit’s recent remediation efforts. Including transferring its Dutch clients to SATOS B.V., a registered Virtual Asset Service Provider in the Netherlands. Bybit has since conducted its operations under SATOS’ regulatory license to align with Dutch compliance standards.

Bybit responded to the fine, emphasizing its commitment to regulatory adherence. In a press release, Bybit’s CEO, Ben Zhou, acknowledged the importance of regulatory cooperation, expressing the company’s dedication to “responsible growth.” He added that Bybit remains focused on building a transparent and compliant ecosystem in Europe.

The Importance of AML Compliance in Crypto

The fine highlights the stringent regulatory landscape for crypto service providers operating in the European Union. The Netherlands introduced mandatory registration in response to crypto’s unique risks, especially regarding anonymity and potential misuse for illicit financial flows. Compliance with AML regulations is increasingly prioritized, with countries worldwide imposing similar standards on crypto firms.

The Dutch central bank’s enforcement action against Bybit reflects its broader commitment to a safe and compliant crypto ecosystem. Bybit’s cooperation and adaptation following the fine underline the importance of transparency and regulatory alignment in a maturing crypto market.

Bybit’s recent penalty serves as a reminder of the regulatory obligations facing crypto firms in Europe and the need for robust compliance frameworks. As Bybit continues to work closely with regulators, the fine illustrates the importance of transparency and accountability for crypto exchanges as they navigate an increasingly regulated global market.