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The Netherlands Authority for the Financial Markets (AMF) and De Nederlandsche Bank (DNB), the country's central bank, have proposed registration requirements for cryptocurrency services operating within the country, according to Dutch media outlet Nederlandse Omroep Stichting (NOS). NOS says the proposal is a response to the request of the finance minister, Pete Hoekstra, who asked that the AMF and DNB develop steps for regulation. Hoekstra plans to introduce the registration system immediately.
The registration system will require crypto exchanges and wallet providers to monitor, collect, and store their customers' transactions and data on the platform and report any suspicious activity to the appropriate authorities. If a report results in the launch of an investigation, the data will be retrieved from the cryptocurrency service.
For an exchange or wallet provider to receive an operating license, it will first enter a testing period with the DNB. The DNB will monitor the service to make sure it is capable of collecting and storing the required data. NOS reports that around 30 companies and organizations in the Netherlands are expected to apply for registration.
According to the AMF and DNB, risky market speculation and fraud related to cryptocurrencies has become "less urgent" as the popularity of crypto has died down within the Netherlands. However, the country's Financial Intelligence Unit stated that "unusual transactions" with cryptocurrencies have increased from 300 to almost 5,000 a year. The regulations are meant to help combat money laundering and terrorist financing schemes.
The proposed registration system hasn't been met with open arms by everyone. Richard Kohl, secretary of the Bitcoin Nederland Foundation, a nonprofit organization that promotes blockchain tech adoption in the Netherlands, said the new measures will cause a "competitive disadvantage" for crypto startups trying to establish themselves alongside the country's banks. With the increased paperwork and mounting fees, Kohl views the proposed regulation as a "big step backward" for the innovation culture of the Netherlands.
Similarly, early this month, Denmark's tax agency was authorized to collect information from three domestic crypto exchanges. The agency will be able to obtain trader names, addresses, and tax information in efforts to track and correct any undocumented cryptocurrency gains and losses.
Just last week, the South African Reserve Bank (SARB) also proposed a crypto services registration system intended to help South African authorities get a better sense of the market so they can revise the existing regulatory framework.