The Ministry of Finance has announced that it intends to introduce new regulations regarding cryptocurrencies on May 18. From then on, there will be new rules for buying and selling bitcoins, including mandatory identity verification via proof of identity. What’s changing?

On 21 April, the Senate voted in favor of the Fourth Anti-Money Laundering Directive Implementation Act. The Ministry of Finance has now announced that it intends to introduce the rules as of May 18. From that moment on, new rules apply in the Netherlands for companies that sell and buy bitcoins.

What changes for you?

This means that from May 18, new and existing Bitonic customers will have to verify their identity (once only) via proof of identity in order to buy or sell. Verification of an e-mail address and a telephone number is also mandatory and customers must provide their address details. Of course, an IBAN bank account number is also required for payment. If you expect to trade a lot, you will also be asked what profession or source of income you have.

So keep in mind that from May 18 you will first have to go through a verification process before you can buy or sell bitcoins. If you don’t do that, you will have to do that later when you want to buy or sell. This can cause unwanted and detrimental delays in the volatile bitcoin market.

Preferably go through the verification process after May 18, so well before the moment you want to buy or sell bitcoins. To facilitate the verification process, Bitonic has developed a number of resources, such as a handy Verification App, which we will inform you about soon.

For verification you need:

• Name and residential address
• Email address and phone number
• IBAN bank account
• Proof of identity (passport or ID card)
• Estimate annual trading volume

If you expect to trade a lot, we also ask about your profession or other source of income.

Verification companies:

Verification for companies can be done via the Bitonic BL3P exchange.

Part of the new regulations is mandatory identity verification, customer due diligence and transaction monitoring for suspicious activity. Bitcoin companies must also register with De Nederlandsche Bank (DNB).

Transaction monitoring

From May 18, companies that buy or sell bitcoins are required to monitor customer transactions for suspicious activity during the relationship. The approach is to combat fraud and money laundering. On the downside, it can impact customer privacy.

Transaction monitoring is partly automated and partly manual. Usually there is nothing wrong and you notice little of it, except for a possible short delay. Sometimes there are ambiguities and in that case we may ask additional questions.

Bitonic can be held jointly responsible if we fail to do so and something later turns out to be wrong. Additional questions are therefore not intended as suspicion or moral judgment, but to gain more insight into the purpose of the transaction and the origin of funds in order to rule out Bitonic breaking the law. We therefore ask for your understanding if we confront you with additional questions.

The new regulations oblige us to report both unusual transactions and all transactions above ??15,000 to the Financial Intelligence Unit.

Privacy

Requesting and storing customer data from bitcoin companies raises privacy concerns for some people. The mandatory transaction monitoring also leads to privacy issues for many.

Bitonic understands and shares these concerns. As the oldest bitcoin company in the Netherlands, by and before bitcoiners, we understand that your financial privacy is essential to you. We will therefore continue to advocate for a different policy. Until then, we are bound by the rules as laid down in the law. Within that framework, we do our utmost to guarantee your privacy and rights.

Since its inception, Bitonic has always been a champion of privacy. Privacy is inherent to security. We use PGP for all our internal communication, sponsor Bits of Freedom since 2014, develop as much as possible ourselves, work with third parties as little as possible and we always use open source software as far as possible.

For these reasons, we have completely developed our verification software ourselves and do not use third-party software. As a result, information is stored on servers in the Netherlands that are under our own management. We have also developed a Verification App so that anyone who does not want to upload a photocopy of their passport can have their ID verified via the built-in NFC chip.