In brief
- Dutch Bitcoin exchange Bitonic has introduced additional verification measures that were demanded by the central bank.
- According to the bank's Sanction Act, local crypto firms now must monitor their customers' withdrawals and verify the ownership of wallets.
- Experts in the crypto sphere have already called the new requirements a precursor "to proper self custody bans."
The Dutch Central Bank (DNB) has imposed a new set of requirements on Netherlands-based, cryptocurrency companies that want to officially register.
Among other things, the bank’s Sanction Act has forced local firms to monitor their customers’ withdrawals and even ask for screenshots of their wallets, according to an announcement published by crypto exchange Bitonic on Monday.
Dutch Central Bank lashing out. More friction in the path of bitcoiners who want to self custody. https://t.co/CEK2jShC9K
— Stephan Livera (@stephanlivera) November 17, 2020
Per the announcement, the exchange is now required—”under protest”—to ask its customers for additional details, such as what purposes they are buying Bitcoin for and what wallets they are using. Additionally, Bitonic is now obligated to verify that each and every user is indeed the legitimate owner of their Bitcoin address by requesting a screenshot of their wallet or a signed message.
“We have repeatedly pleaded DNB to drop this requirement as we find this measure to be ineffective and disproportionate. Unfortunately this has had no effect. The Netherlands is currently the only country in European Union where this far-reaching measure is demanded,” Bitonic noted.
Matt Odell, Bitcoin entrepreneur and executive editor of CoinPrices.io, called the DNB’s new requirement “the obvious precursor to proper self custody bans” and urged Bitcoiners to “stack hard while you still can.”
The exchange previously disclosed the new requirements in a post published on November 3, noting that “this requirement was so strict that, according to DNB, no registration would be made if it was not met.” The DNB reportedly informed Dutch crypto companies of its new rules during a webinar on September 21.
Bitonic noted that not only this new requirement was communicated after four of the six months of the transition period had already passed, but “there is in our opinion no legal basis for it.” The exchange added that other financial institutions, such as DNB-supervised banks, are not subject to similar requirements either.
“We have been in contact with the Ministry of Finance as regulator about this new requirement, they informed us DNB did not consult with them and otherwise refer to the central bank as supervisor,” wrote Bitonic, adding that “An invitation from the VBNL (Bitcoin Trade Association) to DNB for further consultation was however rejected.”
Furthermore, in early November, only one of 38 Dutch crypto companies was officially registered, according to Bitonic. To remedy the situation, the VBNL even sent an open letter to the DNB since the bank reportedly became “unavailable for talks with the trade association” after announcing the new requirement.