- Cryptocurrency regulation in the Netherlands has been tightened after the DNB announced an amendment to the 1977 Sanction Act
- The amendment requires crypto platforms to ask users why they want to buy cryptocurrency and provide proof of ownership after purchasing
- Such a move was set in motion back in January 2019 after a report recommending such action was made for the Dutch Finance Minister.
Cryptocurrency users in the Netherlands face extra scrutiny of their actions thanks to a new set of requirements imposed by the Dutch Central Bank (DNB). The 1977 Sanction Act, which was introduced in order to try and crack down on the sending of money to sanctioned countries, has now been revised to include cryptocurrency. As such, those wishing to buy cryptocurrency through Dutch onramps will be asked why they want to buy it and where they plan to store it, with the DNB even requiring proof of ownership.
New Rules “Ineffective and Disproportionate”
Unsurprisingly, the new ruling has not gone down well with users or cryptocurrency platforms. Once such platform, Bitonic, explaining the new rules to users in barely disguised anger, stating they were complying with the new regulations, which they called “ineffective and disproportionate” under protest.
The new regulations mean that, alongside the host of personal information already required under KYC/AML laws and the recently-imposed Financial Action Task Force regulations, those onboarding through Dutch exchanges will have to explain what they intend to use the cryptocurrency for and where they intend to store it.
Those wishing to store their crypto on a private wallet will now be forced to go to the trouble of either providing a screenshot of their wallet or signing the transaction.
Cryptocurrency Clampdown Not Surprising
While the DNB’s actions are most certainly considered overreach by the privacy-conscious cryptocurrency community, they will not come as a surprise to those who have been keeping an eye on the Dutch treatment of cryptocurrencies.
In January 2019 the DNB laid the groundwork for this move when a year-long investigation into potential cryptocurrency regulation was handed to the Finance Minister, which contained recommendations of a form of user monitoring and transaction tracking, which have clearly been adopted.
The DNB was also one of the first central banks to adopt new European laws on cryptocurrency in January this year, which required all crypto-handling entities to register with the DNB and prove that they were taking steps to fight money laundering and terrorist financing.