The Dutch cryptocurrency market is seeing the first of probably many small cryptocurrency exchanges nipped following the passage of heavily criticized anti-money laundering regulations (AMLD5).
The first effects of AMLD5
Bittr founder Ruben Waterman said last week that his bitcoin exchange, launched in 2018, will close by April 28th because he does not have the capital to meet the new regulations.
The Dutch National Bank (DNB) estimates that registration to the protocol alone has a cost listed $ 36.500, as well as meeting compliance needs. Under Dutch law, companies have to pay their own regulations out of their own pockets.
Ruben said options for his bitcoin savings platform include attending a lawyer, paying a compliance officer, or looking for a third party to manage compliance costs in addition to the government registration fee - impossible , he said, given the small size of the company.
Make sense of it all
In recent months, Dutch cryptocurrency companies have been involved in a long semantic battle with the DNB and the Ministry of Finance (FIN) on the implementation of the EU's fifth anti-money laundering directive (AMLD5), which came into force in January 2020.
Some Bitcoin companies said DNB and FIN are needlessly strengthening the EU directive while continuing to dialogue with the Dutch Parliament. The companies claimed that financial regulators had created a de facto licensing regime while the AMLD5 standard requires simple registration of cryptocurrency companies.
These allegations were further supported by the Dutch Council of State, a widely respected governmental advisory committee in the country, which asked financial agencies to clarify their proposals.
Members of the Dutch parliament had two competing priorities in mind: fight money laundering and support the nation's fintech businesses. In a parliamentary report on April 21, Dutch Senator Bastiaan van Apeldoorn said that cryptocurrencies are unlikely to be used on the same scale as cash for money laundering, but still require supervision.
The search for a light regulatory touch that would not replace small market players remained the target, he said. The legislation has been stagnant for months and was finally adopted on Tuesday April 21, although opinions on its results differ.
Ruben of Bittr wrote: “The Minister of Finance (Wopke Hoekstra) has modified some expressions in order to satisfy the request of the Council of State, but in reality has not changed the content. The Senate raised questions about this practice but still approved the new regulations. " The registration process was still a licensing regime, says Ruben.
Unlike other governments, the Netherlands are not lagging behind on cryptocurrency times. In fact, they are trying to lead the charge in the EU by issuing a central bank digital currency (CBDC), according to a recent DNB report.
