Dutch Bitcoin exchange drags central bank to court over wallet KYC rule

Dutch Bitcoin exchange drags central bank to court over wallet KYC rule

The Dutch bitcoin exchange platform Bitonic has filed an injunction with a Rotterdam court in order to have a wallet review rule issued by the central bank repealed.

As early as November 2019, De Nederlandsche Bank (DNB) had prescribed a crypto exchange to ensure that its users adhere to the strict Know Your Customer protocols. These rules included verification steps for payment portfolios, which Bitonic identified as disruptive.

At the time, Bitonic was just one of three licenses issued by the DNB from 38 applications to central banks via crypto exchanges. In fact, 25 out of 38 applicants sent a joint letter to the DNB asking for more clarity about the need for such strict compliance protocols.

According to the company’s announcement, DNB has reportedly failed to address Bitonic’s concerns about the controversial KYC rule. The exchange also revealed that an independent compliance firm had recently given expert advice on the matter, finding that the central bank’s actions had no legal value.

For Bitonic, the introduction of a comprehensive protocol for checking the wallet violates the existing data protection laws of the customers. “We believe it is critical that a judge consider DNB’s position in order to make it clear whether the requirements are legitimate,” the company added in its announcement.

The bitonic announcement states the aim of the lawsuit:

“Our goal is to quickly stop the extensive processing of personal data that is imposed on us. We would like to go back to the situation in which we ourselves determine, based on risk, whether we ask the customer to provide evidence of his wallet management. “

A spokesman for Bitonic told Cointelegraph that the company regretted being forced to appeal to the courts, but the action was necessary given DNB’s reluctance to enter into dialogue on the issues. The Bitonic representative also announced that other exchanges have expressed support for legal action:

“We do not know whether similar proceedings are being prepared by other parties, but we trust that the court will recognize the broader relevance not only for the crypto industry, but also for their customers.”

As previously reported by Cointelegraph, the additional KYC requirements are causing dissatisfaction among some crypto traders in the country. Bitstamp has expressed some criticism of the exchange’s alleged lack of reluctance to oppose DNB’s policy.

The DNB did not immediately respond to Cointelegraph’s request for comment.

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