Netherlands Financial Authorities Call For Crypto Exchange Licensing System

News, Regulation | January 22, 2019 By:

The Netherlands Authority for the Financial Markets (AMF) and De Nederlandsche Bank (DNB), the country’s central bank, have called for a licensing system for crypto services in order to tackle money laundering and terrorist financing.

In a joint statement, the central bank and financial services regulator said that the licensing system would force crypto wallet providers and exchanges to closely monitor their users’ transactions and report any suspicious activity to the appropriate authorities. The licensing system will reportedly focus on the creation of preventative measures against terrorist financing and money laundering through digital assets.

Cryptocurrency companies will enter a testing period with the DNB before being granted the license. The DNB will reportedly monitor the service to make sure it is capable of collecting and storing the required data. According to Dutch media outlet Nederlandse Omroep Stichting (NOS), around 30 local companies and organizations are expected to apply for registration.

In a statement, Richard Kohl, a board member of the Bitcoin Nederland Foundation, said that the proposed licensing system will cause a “competitive disadvantage” for crypto companies trying to establish themselves alongside local banks. He added that he expects the new measures to bring in large amounts of paperwork and vast expenses to the companies in order to stay compliant.

“This is dramatic for young innovative companies,” Kohl said. “We have long fought for a strong innovation culture in the Netherlands, this is a big step backward.”