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Dutch AML Policy Registration for Crypto Firms Meets Deadline. What’s Next?

19 May 2020 15:21, UTC
Denis Goncharenko

May 18th was the deadline for crypto companies in the Netherlands to officially register with the local financial regulator to comply with the AML rules set by the country’s government earlier in April 2020.

The regulation only concerns companies that conduct crypto-to-fiat operations and transactions while crypto-to-crypto companies are not required by law to gain local approval.

The deadline has already been met, but there is still no concise information on how many companies registered with The Dutch Bank (DNB) and how many others are still continuing operations without approval. However, it’s likely that those that did register will soon get a legitimizing flair on their websites confirming their approval from the Dutch government.

Those that do not have this approval from the DNB and still continue to conduct operations will first face a significant fine on the first act of violation, and on the second could face legal charges that could lead to actual jail time.

Not everybody is liking the new policy

Needless to say, neither the crypto firms nor the regulators themselves are happy with the new guidelines. The Netherlands, much like many other EU countries were forced to adopt the new AMLD5 guidelines set by the European Union. Unfortunately, the new guidelines aren’t necessarily designed in a way that suits every economic or social situation in different countries. In the Netherlands for example, crypto firms are faced with huge sums that they have to pay just to remain in business, in an already unpredictable market.

The most basic of costs that the new AML policies have is a yearly payment of €34,000 for just having the license. Considering that most crypto companies operate on an international scale, they need to consider costs with other countries’ regulators as well, essentially running them to the ground should the crypto market suffer a slump, which it already has multiple times.

Does this help European traders?

The AMLD5 guidelines have come under fire not only from crypto company representatives and traders, but also lawmakers as well. As much as the EU loves to have guidelines and regulations in place on everything, many believe that the AMLD5 is just too much. It deliberately comes off as expensive for the companies themselves without bringing too much value or safety for the traders themselves, nor too much data to the local authorities.

In fact, many lawmakers have said that the custom regulations that are in place in each of these EU countries are much more effective and less disruptive than the AMLD5 guidelines. This comes off as no surprise however, as forcing multiple countries and economies under one regulation is bound to face some issues.

Image courtesy of Risk Screen