Netherland’s New Law on Cryptocurrency Service Providers: Clients Must Explain Why They Want To Buy Bitcoin
World’s largest cryptocurrency with the highest market capitalization Bitcoin continues to rally. Accounting to more than 80 percent in gains over the past six weeks, the coin’s Mayer Multiple-the ratio of price to the 200-day moving average shows this rally is at its early stages. With all this happening in the world of cryptocurrencies, many regions are looking into setting new policies concerning cryptocurrencies and cryptocurrency service providers.
The Dutch Central Bank (DNB), as the regulatory body which enforces new regulations, wants cryptocurrency service providers to act under the country’s sanction act 1977. This act provides provisions for all “supervised institutions,” and DNB demands cryptocurrency service providers to adhere to the same regulations.
Dutch-based cryptocurrency exchange Bitonic says they will reluctantly comply with these ineffective measures. They urge their clients “to formally object to these additional measures and the registration of this data.” The team Bitonic says that they will soon release a custom form intended, specifically for this purpose.
“We have repeatedly pleaded (with the) DNB to drop this requirement as we find this measure to be ineffective and disproportionate. Unfortunately, this has had no effect. The Netherlands is currently the only country in the European Union where this far-reaching measure is demanded.”
Bitonic further added the clients need to verify if the “legitimate owner of the given bitcoin address” to see if the owner controls the wallet and not anyone else. This can be verified by uploading a screenshot from the wallet or by sending a message.
Sanctions Act 1977 on Cryptocurrency Service Providers
Under the Sanctions act 1977 a cryptocurrency service provider “must check whether their clients and any ultimate beneficiary owners (UBOs) are on a Dutch or European sanctions list and report any hits to DNB.”
Netherland and EU rules enforce that no individual or entity on a sanction list must not receive any funds. Any organization or cryptocurrency service provider that fails to comply with the above will have to face legal action under the Economic Offences Act.
Subscribe for newsletter
* You will receive the latest news and updates on Bitcoin, Cryptocurrencies, and Tech!