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Crypto, EU/Europe, Regulatory

Dutch Crypto firm criticises ‘ineffective and disproportionate’ new rules in update to customers

Bitonic logo with bitcoin

By Dan Byrne for AMLi

A DUTCH cryptocurrency company, Bitonic has spoken out against new due diligence laws in the Netherlands which it admits will be a nuisance for its customers.

Bitonic – trading cryptos since 2012 – issued a statement Tuesday describing how it had been “effectively forced” to comply with new regulations from the Dutch Central Bank (DNB), aimed at tightening due diligence and know-your-customer protocols.

“We have repeatedly pleaded DNB to drop this requirement,” the company said in a statement. “We find this measure to be ineffective and disproportionate. Unfortunately, this has had no effect.”

The regulations concern the Dutch Sanction Act 1977 – a long standing law which has been amended to require any cryptocurrency businesses to make sure their clients are not subject to sanctions from the Netherlands or the EU.

Under the rules, clients and transactions must be monitored and the associated data cross-checked against sanctions lists.

If any so-called Ultimate Beneficiary Owners (UBOs) of a transaction are found to be subject to sanctions, the cryptocurrency firm must inform the Dutch Central Bank immediately, and halt all activity.

Bitonic has issued a warning to all clients that it will begin asking for additional details with immediate effect, such as the purpose of a bitcoin purchase or the type of wallet being used.

It will also require verification that a given client is the legitimate owner of a bitcoin wallet, and this will require signed messages or screenshots.

The company has made it clear it does not agree with the new requirements handed down by the DNB, noting that the Netherlands is currently the only country in Europe where they are necessary.

However, the pushback appears to be against a swelling tide in the opposite direction as European lawmakers continue to zone in on cryptocurrencies and develop new rules to control the industry.

Historically seen as a ‘haven channel’ for financial criminals because of lax regulations and increased anonymity, officials from the European Parliament to the Financial Action Task Force as calling for safer, stronger and more transparent rules to govern cryptos – rules which will likely require increased information along the lines of the DNB.

As part of Bitonic’s protest, it has announced a dedicated channel for clients to register complaints – specifically about the new DNB rules. This facility will be online in the near future. 

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