Central Bank of Netherlands Looks to Regulate Crypto Companies to Curb Money Laundering

It has just come to light that the central bank of Holland, the De Nederlandsche Bank, is looking to regulate crypto companies by requiring them to obtain legal licenses that can only be procured after the fulfillment of a host of exhaustive conditions that are quite meticulously crafted.

In relation to the move, the Dutch banking institution claims that such measures will help deter money laundering related activities as well as prevent terrorists from using “crypto for funding their arms etc”.

For companies to obtain this new licence, they will have to report any “unusual transactions” as well as complete a series of KYC checks that ensure the identity of their clients. All of this, according to the Dutch Central Bank, has been done because of the decentralized, anonymous nature of the crypto market (which makes it easy for launderers to move money across the globe).

Do Crypto And Money Laundering Hand In Hand?

According to latest statistical data, over the course of the past 24 months, a little over $88 million has been moved through a total of 46 cryptocurrency exchanges around the globe. To be even more specific, it has been reported that Swiss firm ShapeShift AG has allegedly already facilitated illicit transactions amounting to more than $9 million since 2016.

Similarly, it is also worth mentioning that classified sex-advertising website Backpage has also previously made use of cryptocurrency exchanges to launder millions of dollars using BTC.

More On The Case

Recently, the US Justice Department uncovered that Bitcoin and other cryptocurrencies were being used by pornographic websites to move huge amounts of money. In regards to the matter, a spokesperson for the DoJ said:

“Backpage furthered its money laundering through the use of bitcoin processing companies. Over time, Backpage utilized companies such as Coinbase, GoCoin, Paxful, Kraken and Crypto Capital to receive payments from customers and/or route money through the accounts of third parties.”

In addition to all this, even the CEO of the US Federal Reserve, John Williams, mentioned that due to the crypto sector being plagued by a variety of scams, many investors have stayed away from this unique asset class (which has caused a drop in the global adoption of currencies like ETH, BTC, XRP).

“The setup or institutional arrangement around bitcoin and other cryptocurrencies [is problematic].They have problems with fraud, problems with money laundering and terror financing.”

Final Take

In the midst of all this craziness, it is being reported that some of the data that has been released in relation to the aforementioned crypto scams is not accurate.

For example, in a recent report released by Rémi Quirion, he argues that bitcoin has time and again been wrongly blamed as a go-to vehicle for money laundering and criminal activity.

Quirion also added:

“Bitcoin forms only a tiny part of the criminal money circulating around the planet. The reason: it is less attractive for anyone who wants to make transactions without leaving a trace. Bitcoin’s illicit use is mainly based on anecdotal evidence, usually without supporting data analysis of how it is used across geographical regions, or trends over time”

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