Dutch Central Bank's Onerous Rules Put Crypto Players in Crosshairs
The Dutch central bank has run out of patience with the crypto space. The De Nederlandsche Bank (DNB) put certain players on notice that they have until 2020 to register.
That's when they'll become subject to "integrity supervision."
On Tuesday, the De Nederlandsche Bank claimed it was required to start supervising crypto-related businesses under the fifth European anti-money laundering directive (AMLD5).
Despite cryptocurrencies inching closer to mainstream adoption, especially bitcoin, the central bank remains worried. Its main gripe is that cryptos are vulnerable to financial crimes.
The central bank's move is troubling for several reasons. This includes it moving to make it impossible for crypto outfits to do any business in the Netherlands without government oversight.
Dutch central bank turns crypto words into action
According to the statement: "Firms offering services for the exchange between virtual money (cryptos) and regular money, and crypto wallet providers" should reach out to the DNB.
Board members and shareholders of these companies could be subject to assessments, too.
Those that comply will likely be subject to a high level of government oversight. All have until Jan. 10, 2020, to register.
"Firms that do not register will no longer be allowed to provide crypto exchange services and wallets."
The bank warns:
"If these firms contact us now, we can reach them more easily later on and also get an idea of how many firms will come under our supervision. They must demonstrate that their processes are effectively designed to prevent money laundering and terrorist financing and that board members and other policymakers adequately manage these processes."
Years of effort to shutter crypto outlets
The last time the DNB floated such an idea was at the end of 2018. At the time, CCN reported that the Dutch central bank wanted to regulate crypto companies by requiring them to get licenses in order to operate.
The logic was the same. The regulation is needed because "the decentralized, anonymous nature of the crypto market makes it a target for money launderers," according to the DNB.
This time around, the central bank is using a directive, or proposal, as the crutch. It's doing so even though the directive has not been implemented into Dutch law.
"We are required to start supervising these businesses under the fifth European anti-money laundering directive (AMLD5) and its implementation in Dutch law. Cryptos are vulnerable to financial crime, which is why it is important to set up integrity supervision now.
The proposal is now before the Dutch House of Representatives, according to the bank.
The central bank had parting words about looking forward to discussing its supervision with affected crypto players. For the sake of aggravating crypto players it seems, the central bank said:
"We look forward to discussing our supervision with them as well as the guidance we can provide in terms of compliance."
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