Coinbase’s Regulatory Approval in the Netherlands

Coinbase officially confirmed its registration in the Netherlands on Thursday, September 22, 2022. As the largest cryptocurrency exchange in the U.S., Coinbase will now offer its crypto products, including services for retail and institutional clients, to the Dutch market. According to official records from the Dutch Central Bank (DNB), Coinbase is one of the major international exchanges to be approved by the central bank, alongside smaller local crypto companies. The DNB’s public register lists Coinbase Europe Limited and Coinbase Custody International as licensed crypto service providers.

The DNB will supervise these listed Coinbase entities to ensure compliance with the Anti-Money Laundering (AML) rules, Anti-Terrorism Financing Act, and the Sanctions Act. However, Coinbase’s crypto services are not subject to prudential oversight by the Dutch Central Bank, meaning there is no monitoring of operational or financial risks related to crypto services, nor is there specific financial consumer protection in place.

Coinbase’s approval follows the DNB’s publication of a policy document on September 16, 2022, regarding sanctions screening for crypto transactions. This Q&A document highlighted various risks tied to cryptocurrencies, including the issues of anonymity.

Securing regulatory approval from the Dutch Central Bank paves the way for Coinbase to eventually offer services throughout the entire European Union. This will occur once the European Union’s Market in Crypto Assets (MiCA) regulation is fully implemented, allowing Coinbase to expand to the remaining 26 EU countries. CryptoChipy is aware that the EU finalized the details of this legislation earlier this week, and Coinbase confirmed that licensing applications are already in progress for several other significant markets.

Nana Murugesan, Coinbase’s Vice President of International and Business Development, emphasized that the company’s registration in the Netherlands aligns with its commitment to compliance. He expressed that this move is part of Coinbase’s broader goal of becoming the world’s most trusted and secure crypto platform. Murugesan highlighted the importance of the Netherlands as a key market for the company and shared his excitement about bringing the benefits of the crypto economy to Dutch consumers.

Coinbase’s Expansion Across Europe

Coinbase has been rapidly expanding its operations across Europe, with a presence in over 40 European countries. Its recent move into the Netherlands is part of this broader strategy. In June, Coinbase announced its plans to expand into Europe, citing the impact of a significant downturn in crypto markets.

In July, Coinbase also secured approval from the Italian AML regulator, Organismo Agenti e Mediatori, for registration as a Crypto Asset Service Provider. The company is also in the process of registering in Spain and France. Coinbase’s European footprint includes major hubs in Ireland, the United Kingdom, and Germany.

This aggressive expansion comes at a time when Coinbase has faced significant financial challenges, including substantial losses in consecutive quarters of 2022. For example, its Q2 losses reached $1.1 billion, marking its largest loss since the company’s IPO on the Nasdaq in 2021.

Coinbase’s European expansion strategy mirrors that of its competitors. Binance has registered in France, while Bitstamp is registered in Italy, and both exchanges have been securing regulatory approvals throughout 2022. There is strong belief that these approvals will enable these exchanges to operate seamlessly across the EU once the MiCA regulations are fully adopted into law.

The Growing Adoption of Cryptocurrencies in the Netherlands

The cryptocurrency industry is recognizing that regulation and adoption go hand in hand. Crypto has evolved alongside the shifting views of governments, with some countries being more welcoming to crypto and others remaining more hostile. For exchanges, it is becoming increasingly crucial to secure licenses in specific regions to expand their user base and operate legally. Thankfully, the Netherlands has not been as stringent with its crypto regulations and currently does not prohibit crypto trading or its use within the country.