Cryptocurrency

New Licensing Systems to End Anonymous Crypto Trading in the Netherlands

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As part of an active fight against anonymous sale and purchase of crypto assets, Netherland is persistent to reduce anonymous crypto trading. Recently, the Netherlands Authority for the Financial Markets and De Nederlandsche Bank have advised the Netherlands’ Minister of Finance to introduce a licensing system for crypto services.

Pete Hoekstra, the Netherlands’ Minister of Finance, is advised to make licensing procedure for crypto exchanges and wallet providers, in order to curb anonymous crypto selling. The minister announced that he immediately started working in line with the advice. Remarkably, The Netherland’s Financial Intelligence observed that in a year, the number of doubtful crypto transactions has increased from an average of 300 to up to 5,000.

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The suggested licensing system would make crypto exchanges and wallet providers to keep an eye on their customers’ transactions and report to authorities if they find any suspicious activity. The exchanges will also have to maintain the KYC information that ensures the identity of their clients. This information should be given to authorities in case of an investigation. With that, The Netherland’s central bank believes that such measures will help to prevent money laundering and terrorist funding related activities. The bank also notes that the exchange firms will be examined before granting the license.

Now, the government is more concerned over issues like money laundering and terrorist financing via crypto. As the decrease in speculation risks has lessened the urgency of investor protection actions. On this, Richard Kohl, a board member of the Bitcoin Netherlands Foundation has recognized the new regulations as a big step backward in the local innovation culture, stating that the measure is “dramatic for young innovative companies.”

He also believes that the step is too extreme. He noted, “Banks and financial institutions already need to keep track of customer and transaction information […] you may wonder how well our personal information is protected and used, such as how the Chinese government wants to be able to follow all transactions of all citizens.”

There are 30 companies in the Netherlands which will apply for the permit, or they can get punished. Moreover, all EU Member States are now supposed to implement stricter rules for crypto. Though, it depends upon the countries how they want to structure the regulations.

Ruti Vora

Ruti regularly contributes in-depth news articles for leading cryptocurrencies. She contributes technical chart-based price updates and analysis pieces on the world's leading digital currencies.

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