Dutch Crypto Exchanges and Wallets To Come Under New AML/CTF Regulations

Wilfred Michael 

Wilfred Michael

News reporter

14 December 2018,

Cryptocurrency exchanges and wallet providers based in the Netherlands will come under new EU banking regulations proposed in a draft rule by the country’s Ministry of Finance on Dec 11.

According to financial services publication, RegulationTomorrow, Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws that form part of the EU banking regulations will for the first time apply to “entities which provide services that are in charge of holding, storing and transferring virtual currencies.”

Such classification will practically include “virtual currency exchange platforms (VCEPS) and custodian wallet providers (CWPs).” The report also names crypto service providers who function in almost the same way as traditional auditors, external accountants, and tax advisors.


How The New AML/CTF Laws Affect The Crypto Industry

Sections of the new regulations which affect the crypto industry include:


1. Improved Check On Transactions Involving High-Risk Countries - According to the draft rule, cryptocurrency exchanges will now be required to enforce enhanced controls on transactions involving countries that are prone to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) cases.


With this, there is a chance that people who trade on these exchanges will be reported to the Dutch authorities in case of any suspicious trading activity.


2. Improved Transparency: Under the proposed draft, exchanges are compelled to provide data about their clients, upon request by the authorities or Financial Intelligence Units. This measure is similar to what Japan wants to add to its crypto regulation to catch tax evaders.


3. The anonymity of e-money transactions: The crypto exchanges will only allow users to stay anonymous while using their service if they are not carrying out transactions above €150 ($169) with their prepaid cards. Transactions above this value will be restricted until the individual or business provide proof of identification.


As per the report, the laws, regulations and administrative systems that will allow the draft rule to operate in the Netherlands, should be fully implemented before the end of January 2020.