New Crypto License Proposal Could ‘Suffocate Startups’ in the Netherlands
According to a new report released by the Nederlandse Omroep Stichting (NOS) a week back, it was found that some key members of the Dutch crypto community have proposed regulations that could kill off many young crypto companies in their infancy.
For those of our readers who may remember, late last month the Dutch Minister of Finance Pete Hoekstra said that he was looking to”install an official licensing system” for crypto service providers in the near future.
Crypto Exchanges And Wallet Providers All Set To Face Stringent Monitoring Requirements
If called into the effect, the new licensing system will force Dutch cryptocurrency wallet providers and exchanges to “closely monitor their users’ transactions”. In case they come across any unaccountable activity, crypto service providers will be bound by law to report such activities to relevant authorities.
Additionally, one of the other goals of the new regulatory framework will be to establish a system that will focus on things like:
- Prevention of crypto-related terrorist financing activities.
- Elimination of money laundering through cryptocurrency.
In this regard, it is worth noting that the NOS claims that the number of unusual transactions that have been detected over the past year has increased from 300 to 5,000.
New Regulations Could Destroy The Dutch Crypto Ecosystem
With the introduction of the new rules, it will become mandatory for exchanges and wallet providers to keep close tabs on customer data— which if requested by the government, needs to be handed over to relevant authorities for criminal investigations.
Also, in order to be granted a full license, firms will have to fulfill a set of different compliance procedures which will make sure the startup is fully capable of meeting the aforementioned monitoring and record-keeping requirements.
Even though there are some voices within the Dutch crypto industry that have claimed that the new regulations might make the country’s digital ecosystem “more healthy”, Bitcoin Nederland Foundation member Richard Kohl is of the opinion that such stringent policies will only cause
“young companies to collapse”.
He then went on to add:
“Banks and financial institutions already need to keep track of customer and transaction information. You may wonder how well our personal information is protected and used, such as how the Chinese government wants to be able to follow all transactions of all citizens.”
The Netherlands has been closely linked with the altcoin industry since the start of 2016— when the national government announced that it was all set to open its very own blockchain technology development center.
Similarly, during August last year, De Nederlandsche Bank released a statement stating that while crypto assets are
“not illegal they cannot be classified as money”.