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Dutch Central Bank cites crypto’s vulnerability to financial crimes; orders its supervision of the industry

Legal

ambcrypto.com 03 September 2019 08:22, UTC
  
Reading time: ~2 m

As concerns around money laundering and terrorism financing grow, crypto-regulations have started to gain momentum. These concerns have now reared their head in The Netherlands. Due to cryptocurrencies not being fully regulated in the country, crypto-managing companies were not previously required to report to regulatory bodies. However, that’s not the case anymore.

According to the latest press release from the Dutch Central Bank, companies offering crypto-trading and crypto-custody services will now have to operate under the supervision of De Nederlandsche Bank. Previously, digital assets and crypto-entities were not regulated as they were not a part of the Financial Markets Supervision Act [FMSA]. The central bank cited multiple cases of money laundering to support its case for supervision of the industry.

Owing to the new rule, ownership and licensing requirements in The Netherlands will be modified. Companies in question will be required to register themselves under DNB’s management. In order to carry out liquidity management of cryptocurrencies smoothly, this step is deemed mandatory.

After registration, crypto-services offering companies must demonstrate that all procedures undertaken by them are protected against money laundering. Even after the registration is done, DNB will keep a close eye on the activities of companies to ensure that they are complying with the rules of money laundering. Further, the declaration clarified that companies failing to register with DNB will not be granted permission to carry out exchange services.

The order follows a European directive that has made way into Dutch legislation. It specified that companies must commit to DNB, by lawfully registering themselves by 10 January 2020. As of now, this bill is being examined in the Lower House.

As all crypto-service providers are required to adhere to the deadline, DNB is open to discuss the structure of supervision, in addition to providing proper guidance. This update was shared over DNB’s official Twitter handle. The tweet read,

“#Persbericht Providers of crypto services must prepare for DNB supervision. We are happy to enter into discussions with these companies about this supervision.”


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