The Dutch central bank, De Nederlandsche Bank (DNB), has fined cryptocurrency exchange Coinbase, 3.3 million euros ($3.6 million) for failing to follow local rules for financial service providers.

The exchange reportedly failed to obtain the necessary registration to offer services in the Netherlands prior to beginning operations in the country. The DNB said it took into consideration the size of Coinbase as a company and the fact that it has a significant number of customers in the Netherlands.

The authorities claimed Coinbase was non-compliant during the time period between November 2020 and August 2022.

A Coinbase spokesperson commented on this saying that the company disagreed with the DNB’s fine, saying it was based on the time it took for Coinbase to obtain its registration in the Netherlands and includes no criticism of our actual services. 

The spokesperson also added that Coinbase should not be penalized for playing by the rules and engaging in this process.

According to decrypt, the penalty was increased from a base amount of $2.18 million. The fine was also increased due to Coinbase’s size as one of the largest crypto exchanges in the world, as well as the number of customers it serves in the Netherlands. However, the total amount was then reduced by 5% in recognition that the company had always intended to complete registration.

The crypto exchange now has until March 2 to object to the fine.

“While we respect DNB’s authority to enforce its regulations, we are carefully considering the objections and appeals process,” the spokesperson said.

In December 2022, the DNB targeted the cryptocurrency exchange KuCoin saying that it too was operating without a license and therefore offering services illegally. 

In 2021, it also targeted Binance Holdings Limited with similar allegations, for which the exchange paid more than 3 million euros in fines due to the violations.