Minister of Finance Hoekstra has presented an amendment to the Wwft, the Money Laundering and Terrorist Financing Prevention Act. The most important changes in this bill are related to bringing virtual currencies under the Wwft.

The Wwft, as the name suggests, aims to limit the risks related to money laundering and terrorist financing. This law is already common for the current fiat system, but now also adds ‘virtual currency’ to the supervision.

Gatekeeper function

Bitcoin companies will act as ‘gatekeepers’. In this they must exercise control over the transactions that take place between bitcoin and the cashless money. The bill describes this as follows:

To protect the integrity of the Dutch financial system, a system with gatekeepers has been chosen in accordance with international standards. These gatekeepers investigate their services to their clients to prevent money laundering or terrorist financing. […] providers of custodial wallets and exchange services between virtual and fiat currencies will also act as gatekeepers. Through these providers, virtual currencies can be converted into fiat currencies and thus enter the financial system. This also applies to providers who offer a custodial wallet and have access to the virtual currency of their users via the private key.

Permit requirement

The European Anti-Money Laundering Directive prescribes that providers of exchange services between virtual currencies and fiat currencies and providers of custodian wallets must be registered. In the legislative proposal, this registration is given the form of a permit obligation.

The licensing requirement is being introduced because, according to the legislator, there is a high risk of money laundering or terrorist financing for these services. This is related to the anonymity associated with virtual currency transactions.

This obligation applies to anyone who wants to offer services in or from the Netherlands. Companies established abroad will also have to comply with this permit requirement before they are allowed to continue their business operations here.

Supervisor

The bill designates De Nederlandsche Bank as the Wwft supervisor for these providers. DNB will therefore monitor the integrity of these providers. This only broadens the spectrum of providers. DNB is already involved in Wwft supervision of banks, most financial institutions, trust offices and exchange institutions, among others.