The cryptocurrency industry in the Netherlands has won a small but significant battle. The country’s central bank has canceled some of the excessive screening procedures it placed on crypto service providers last fall. The move takes place after a local operator takes the matter to court.
DNB takes a step back in the event of illegal KYC requests
Nederlandsche Bank (DNB) has reversed some recently enforced regulations regarding the crypto industry. In November 2020, the regulator ordered crypto platforms to obtain additional information from users as part of their know-your-customer procedures. Cryptocurrency service providers were required to verify owners of Bitcoin addresses. As a result, customers have been asked to upload screenshots of their wallets and give reasons for their crypto purchases.
The controversial rules became the apple of the discord between the DNB and the Dutch crypto industry. In a letter to the bank, 25 service providers expressed concerns about the stricter regulations. Earlier this year, the Dutch exchange Bitonic requested to be exempted from the obligation to check the wallet, as it did not have a proper legal basis and was violating the privacy of its customers. The company eventually took the case to court.
In April, the provisional easing judge of the Rotterdam District Court obliged the central bank to respond to Bitonic’s objections. The exchange announced on Thursday that it had received the DNB’s new decision, with the regulatory authority confirming Bitonic’s view that the obligation to review is contrary to the law and should not have been set as a condition for registration. In correspondence with the trading platform, the central bank states:
The DNB declares the objection to be well founded and revokes its main decision of November 17, 2020.
Bitonic is dropping the wallet verification asap
In response to the DNB’s letter, Bitonic assures customers that “we will remove the wallet verification measures as soon as possible”. The trading platform states that it will no longer ask for screenshots of all transactions in its wallets and plans to look into other options to further simplify the user experience. The exchange also says:
We are pleased that this frees our customers from unlawful and onerous proceedings.
The crypto provider shares its concern that the central bank only responded to the industry’s complaints after the Dutch judiciary intervened and asks a rhetorical question: “What if Bitonic hadn’t gone to court?” The company notes that the entire country’s crypto sector has faced high costs and administrative burdens, and hopes that politicians will consider the case.
“The process we went through has affected innovation and the business climate in the Netherlands. This is in stark contrast to the claim that the Netherlands is promoting an innovative business climate, ”Bitonic promises follow-up after carefully examining the DNB’s recent decision, which it describes as a positive development for the country and the international community.
What is your opinion on this regulatory development in the Netherlands? Do share your thoughts on the matter in the comments section below.
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