Order subject to penalty imposed on Payward International Markets Limited for offering crypto services in the Netherlands without registration

Companies wishing to provide crypto services in the Netherlands are required to register with DNB pursuant to the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft).

Order subject to penalty

An order subject to penalty is a remedial measure that instructs (orders) a company to do something or to cease doing something. In this case, DNB ordered Payward International to stop offering crypto services in or from the Netherlands without the required registration with DNB. DNB gave Payward International a period of eight weeks to comply with the order without being required to pay penalties. This period ended on 7 October 2023. The order subject to penalty indicated that Payward International would have to pay €500,000 in penalties immediately after the expiry of this period for each week during which it failed to comply with the order in full. This penalty amount could reach a maximum of €4 million.   

Eight full weeks have passed, which entails that Payward International must pay €4 million in penalties. 

Registration requirement

The registration requirement for crypto service providers was introduced on 21 May 2020 because of the high risk of money laundering and terrorist financing associated with crypto services. This is related to the anonymity associated with crypto transactions. The registration requirement enables DNB to monitor the risk of illicit financial flows more effectively.

The Wwft aims to counter money laundering of criminal proceeds and terrorist financing. Action against money laundering is of high importance to ensure effective countering of different forms of serious crime. Concealing the origin of criminal proceeds enables perpetrators to keep out of the reach of the investigative authorities and enjoy their ill-gotten gains undisturbed.

Payward International contravened the objectives of the Wwft by providing crypto services in the Netherlands without registration with DNB. Among other factors, this meant that Payward International was unable to report unusual transactions to the Financial Intelligence Unit-Netherlands during the period of non-compliance. As a result, a large number of unusual transactions may have gone unnoticed by the investigative authorities during this period.

On 7 February 2024, Payward Continental Services Limited (PCSL) obtained its registration as a crypto service provider with DNB. PCSL is part of the same group as Payward International.

Objection

Payward International objected to the order subject to penalty on 4 August 2023. On 21 December 2023, DNB took a decision on objection.

Further information

The full text of the order subject to penalty, with the exception of confidential information, can be found here. You can also contact our Information Desk by telephone on 0800 -020 1068 (freephone in the Netherlands) or +31 20 524 9111 (if calling from abroad).