Dutch regulators urge crypto operators to get ready for regulation as of January 2020

Maria Nikolova

Firms offering services for the exchange between cryptos and regular money, and crypto wallet providers have to register with De Nederlandsche Bank.

Firms offering services for the exchange between virtual currency and regular money, and crypto wallet providers are expected to become subject to integrity supervision by De Nederlandsche Bank (DNB) as of January 10, 2020. The regulator advises these firms to start their preparations in advance.

In particular, crypto firms will have to register with DNB. In addition, their board members and some shareholders (qualifying holdings) will need to be assessed. They must demonstrate that their processes are effectively designed to prevent money laundering and terrorist financing, and that board members and other policymakers adequately manage these processes. Once a firm is registered and DNB has assessed board members and other policymakers, the regulator will monitor that it complies with the rules on money laundering and terrorist financing. Firms that do not register will no longer be allowed to provide crypto exchange services and wallets.

The European directive states that the duty to register must take effect no later than January 10, 2020. It could also apply from a later date, however, depending on the exact timing of the directive’s implementation into Dutch law. The legislative proposal for implementation is now before the Dutch House of Representatives.

Like the Dutch Authority for the Financial Markets (AFM), DNB has warned against the integrity risks associated with cryptos.

In May this year, the Dutch Fiscal Information and Investigation Service (FIOD), in close cooperation with Europol and the authorities in Luxembourg, put an end to cryptocurrency mixing service Bestmixer.io. The investigation resulted in the seizure of six servers in the Netherlands and Luxembourg.

Bestmixer.io was one of the three largest mixing services for cryptocurrencies and offered services for mixing the cryptocurrencies bitcoins, bitcoin cash and litecoins. The service started operating in May 2018, with its turnover hitting at least $200 million (approx. 27,000 bitcoins) in a year’s time.

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