Crypto exchanges from the Netherlands are now required by law to acquire additional information from clients about their bitcoin addresses.
The clients must now furnish exchanges with reasons why they wish to buy bitcoin. They will also need to inform the exchange officials about the kind of wallet they use.
Supplementary Requirements
The new Dutch regulatory changes have been effective despite the protestations by some of the country’s crypto exchanges. The Dutch Central Bank (DNB) wants crypto service providers to adhere to the provisions of the country’s Sanction Act 1977 like other “supervised institutions.”
In the meantime, Bitonic, the Netherland-based crypto exchange that opposed the new regulation, wants the clients to support their stance. To do this, the exchange is asking clients “to formally object to these additional measures and the registration of this data.” The Bitonic team says that they will shortly “release a custom form intended specifically for this purpose.”
In a statement made thru the exchange’s blog, the Bitonic team says that it will comply with the ineffective measure. The statement continues:
“We have repeatedly pleaded (with the) DNB to drop this requirement as we find this measure to be ineffective and disproportionate. Unfortunately, this has not taken effect. The Netherlands is currently the only country in the European Union where this far-reaching measure is demanded.”
Still, the statement informs the clients of an additional requirement that obliges the exchange to verify if the “legitimate owner of the given bitcoin address” is actually in control of it. To perform the verification procedure, clients are requested to “upload a screenshot from your wallet, or by signing a message.”
Dutch Law
The Netherlands’ Sanctions Act 1977 states that a crypto service provider “must check whether their clients and any ultimate beneficiary owners (UBOs) are on a Dutch or European sanctions list and report any hits to DNB.” Under Dutch and EU sanction rules, no funds may be made available to the individuals or entities that are on a sanctions list.
The organizations that fail to comply with the new provisions will be punished under the Economic Offences Act.
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