Bitonic Exchange Takes Legal Action Over Dutch KYC Rules

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  • Dutch cryptocurrency exchange Bitonic and filed a preliminary injunction against the Dutch central bank over new KYC rules
  • The new rules, implemented last week, require evidence of wallet ownership from users
  • Bitonic believes that the rules are “ineffective and disproportionate”

A Dutch Bitcoin exchange has taken the first steps towards legal action against the Dutch central bank (DNB) over recently implemented KYC/AML rules. The new rules dictate that anyone wishing to withdraw cryptocurrency from an exchange must first provide proof of ownership of the wallet in question, while those buying tokens from exchanges must first explain what they intend to use them for and where they intend to store them.

New Rules “Ineffective and Disproportionate”

Bitonic was one of the exchanges immediately impacted by the rule change and made their opposition to it clear on the day they were forced to implement it, saying in a statement that they have long felt that the measure is “ineffective and disproportionate” and offered users “the opportunity to formally object to these additional measures and the registration of this data.”

Bitonic has now gone one step further and filed a preliminary injunction that seeks the suspension of the new wallet verification rules. In the filing they attest to their belief that the measure lacks “proper legal basis”, a theory apparently backed by financial compliance Bökkerink Compliance International this week.

Bitonic Challenges Legality of New Rules

Bitonic says that it “did not receive a convincing answer to the fundamental questions we raised on this matter during the registration process” and is still awaiting clarification on certain other matters regarding the new rulings, which Bitstamp was also forced to adopt last week.

Bitonic says that it is taking legal action because it is “of crucial importance that a judge considers DNB’s position” to ensure that it is on the right side of the law, which the exchange clearly feels it is not.