A Dutch bitcoin exchange (BTC) has filed an injunction with a court in Rotterdam to suspend the central bank’s additional wallet verification requirements. Bitonic is trying to question the new rules of De Nederlandsche Bank (DNB) of September 21, 2020.
Dutch Exchange argues that additional KYC rules do not have a proper legal basis.
According to the Bitcoin exchange’s announcement, the additional KYC (Know Your Customer) requirements imposed by the central bank violate user privacy. However, the crypto company makes it clear that the legal obligations in this case are “not up for discussion”.
A section of the first set of rules published by the Dutch Central Bank in 2019 reads:
Crypto service providers must check whether their customers and owners of final beneficiaries (UBOs) are on a Dutch or European sanctions list and report hits to DNB. Risk based checks are not allowed. Compliance also means that institutions have to check incoming and outgoing payment transfers.
However, when Bitonic received registration from the DNB as a “provider of crypto services”, they had to comply with the new measures, with which they primarily did not agree. At the time, the bitcoin exchange said:
From now on we need to ask for additional details, e.g. B. the purpose for which you plan to buy bitcoins and what type of wallet you are using. In addition, we need to verify that you are the legal owner of the given Bitcoin address by asking you to upload a screenshot from your wallet or by signing a message.
After consulting independent experts, the company claims that the additional KYC requirement “has no proper legal basis”. Bökkerink Compliance International advised.
The Netherlands-based Bitcoin exchange commented on the matter as follows:
We have not received a convincing answer to the basic questions [from the DNB] We addressed this during the registration process. In addition, we are still looking forward to a reply to a letter to the DNB that was sent by 25 of the 38 registering parties in early November 2020. In the meantime, we have been forced to work in a way that violates data protection regulations for some time. To avoid this, we asked DNB again at the beginning of this year to revoke the request. This application was rejected with a reference to the Sanctions Act. However, we do not agree to this statement.
KYC rules are still a controversial hot topic in the Dutch crypto community
The history of the Netherlands aiming to regulate the crypto industry goes back to 2018. The government argued it wanted to prevent money laundering and alleged terrorist financing that could favor cryptocurrencies.
However, the KYC measures implemented by the Dutch central bank sparked controversy in the local crypto community. Indeed, Dutch users on social media have complained about Bitstamp’s passivity in crypto exchanges to question the DNB’s rules.
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