The Dutch Central Bank Introduces Plans to Regulate Crypto Companies

10 January 2019

The Dutch Central Bank is the latest to propose new regulations to help combat money laundering and financing terrorism in the crypto world.

In recent news, the Dutch Central Bank has taken necessary precautions to regulate cryptocurrency companies.

Their new stipulation means that any crypto-related business has to attain licenses before being able to legally operate.

This bold move by the Dutch Central Bank is designed to help fight cryptocurrency’s ongoing battle with money laundering cases and potential use of it in financing terrorism.

According to the report published in the country’s De Telegraaf newspaper, cryptocurrency companies who qualify for the licenses must declare any “unusual transactions” and follow strict know your customers (KYC) checks.

The proposed law will essentially place crypto companies under the scope and control of the Dutch Central Bank.

The report states that “The measure should help prevent such virtual coins being used to launder criminal money or to fund terrorism.”

In light of this new proposed law, regulators have invited crypto companies to respond to the new proposal and have said that they are interested in hearing about any ideas on more measures that can reduce money laundering risks.

Is money laundering a growing issue within the crypto world?

Money laundering has been a common topic associated with cryptocurrency due to its decentralised means. As a result, this has lead to a number of high-profile cases.

For instance, in September 2018, it was reported that the CEO of Danske Bank resigned following the news of a $235 billion money laundering scandal. While U.S. based ShapeShift were found to have processed over $9 million in illegal transactions in the last two years.

However, there are some experts who believe that these reports are exaggerated and blown out of context.

In a 2018 report, Quebec’s government published a report stating that bitcoin wasn’t the “go-to vehicle” when it comes to money laundering and funding other criminal activities.

Instead, they believe that fiat currencies are just as vulnerable.

Furthermore, in January 2018, blockchain analytics firm, Elliptic, found that only a small proportion of bitcoin transactions between 2013 and 2016 resulted in cases of money laundering.

Nonetheless, the Dutch Central Bank’s stance on digital assets follows a growing theme among other European Union (EU) countries.

The UK is set to ban BTC-linked derivatives, while France is trying to transform itself into a crypto leader with more welcoming laws.

Spain has even started making a change, revealing that they’ll be monitoring 15,000 cryptocurrency investors to help prevent tax evasion and money laundering.

However, there is no parallelism or cohesion in any of these new regulations, so it’s just a matter of keeping an eye on how every country in the EU develops.

One thing’s for certain, cryptocurrency is set to see further regulations introduced in 2019 – whether that helps reduce money laundering and other criminal activity, only time will tell.


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