More victims and uncertainty due to intended new regulations

The planned and strict Dutch implementation of the European anti-money laundering directive AMLD5 in the Money Laundering and Terrorist Financing Prevention Act (Wwft) is already causing damage among Dutch crypto companies. Increasingly, Dutch crypto companies are being forced to stop providing services or leave the country. After Chopcoin, Coingarden and Simplecoin previously announced that they would bear the brunt of the planned rules, Deribit and Post-a-Coin seem to be the latest victims. Is the government threatening to drive innovation out of the country with too strict regulations?

New regulations are likely to arrive soon to regulate Dutch bitcoin companies. This includes registration with De Nederlandsche Bank (DNB), mandatory identity checks and transaction monitoring.

Many bitcoin companies are concerned that the intended rules go much further than the European directive prescribes, entail high costs, create unnecessary barriers and, moreover, come at the expense of customer privacy. The Dutch Data Protection Authority (AP) also stated that the intended rules are in the nature of unwanted mass surveillance and pointed out to the minister possible privacy violations.

At least five Dutch bitcoin companies have now announced that they must take drastic measures due to the intended rules. Mining company Simplecoin and gaming platform Chopcoin have already indicated that they are discontinuing their services due to privacy considerations, and the additional costs resulting from the new regulations could not be bridged for the broker Coingarden. More recently, the sole proprietorship Post-a-Coin also announced that it would close its doors and derivatives platform Deribit decided to move from the Netherlands.

Insecurity

And that while the legislation has not even been passed by the Senate. According to an earlier schedule, the new rules were to take effect from January 10, but that date was not met. According to the new schedule, a next meeting will follow on January 28, after which there is a chance that the rules will come into force shortly afterwards, but there is not yet much clarity about this.

Meanwhile, there is still a lot of substantive uncertainty about the rules in the bitcoin community. After all, they have not yet been determined, but bitcoin companies are expected to prepare for them. There is therefore a lot of ambiguity and, moreover, there are substantive issues. For example, Minister Hoekstra indicated that he had opted for a minimum implementation of the European directive in the form of a registration obligation, but a letter emerged in December from which it appears that DNB urged the ministry for a licensing system and recommended rules from the strict Financial Supervision Act. (Wft) in the new law.

Bitonic

Fortunately, Bitonic is large and robust enough to withstand the increased regulatory pressure and burden. We have therefore been preparing internally for some time for the intended new rules. This not only requires adjustment of our systems and work processes, but also expansion of our support and compliance departments.

The costs of this are considerable and we can bridge them, but we can agree that the proposed rules represent an excessive burden for the sector and create unnecessarily high thresholds for smaller or newer market parties. This hinders innovation and complicates the adoption and use of what many consider a technological and economic breakthrough. We also recognize ourselves in the concerns about citizens’ privacy as a result of the intended rules.

In collaboration with VBNL, we will therefore continue to advocate for a more lenient policy and continue to actively enter into dialogue with politicians and decision-makers in order to bring about a change of course. Until then, we ask for your understanding if you are confronted with additional questions by our support or compliance employees when buying or selling bitcoins via www.bitonic.nl or www.BL3P.eu.

Follow this link to read more about the intended upcoming regulations and mandatory identity checks when buying or selling bitcoins.

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