Rampant Struggles With Money Laundering Leads Dutch Ministers To Fight Back With Cryptocurrency Regulations
- Dutch financial ministers recommended new policies for the cryptocurrency industry.
- The FATF recently issues notice to their member countries regarding the information that exchanges need to provide each other with about their customers.
Money laundering has been a concern of economies around the world as there have been more anonymous coins issued and new ways to conceal transactions. In a new report from The Next Web’s Hard Fork, it looks like the Dutch financial ministers are pushing for the government to tackle this problem with improving regulations for cryptocurrency.
Wopke Hoekstra, The Minister of Finance, and Ferdinand Grapperhaus, Minister of Justice and Security, notified the parliament that they would like to reduce the risk that comes with cryptocurrencies. In establishing new regulations, the Netherlands could ultimately become a leader in aggressive work against money laundering.
The five-page letter, which is addressed to the chairman from this authority, stated, “Crime cannot pay,” explaining that loose regulations from the government simply provide an opportunity to evade the government. Furthermore, it says,
“These illegal proceeds can also be used to finance the same or new criminal activities.”
Without the proper regulations established in the industry, it is possible that the criminals using this industry to conceal their activity, which ultimately will “compromise the integrity and security of the financial system.” The letter continues, adding that this issue is an important issue for the government to consider, making it necessary for them to fight back against money laundering collaboratively.
In attacking money laundering, the ministers believe that there is a three-step way that they can effectively reduce these concerns, and the first of those steps is to regulate the wallet providers and exchanges involved with cryptocurrency. Furthermore, the regulations involved initial coin offerings (ICOs) and cryptocurrency services, helping these platforms to follow the standards set forth by the Financial Action Task Force (FATF).
Adding to their statements to the government authorities, the ministers request that cash payments exceeding €3,000 are banned and that the banknote for €500 is pulled from circulation. These requests for changes come around the same time that the FATF recommendations were released for the 37 member countries, which are not mandatory. However, for the countries that choose to follow the regulations, they must do so within the next year.
In the new recommendations, FATF said that there should be information passed between the virtual asset service providers about the customers when transfers happen. The transfers would ultimately include information about the sender (name, account number, and physical address) and the recipient (name and account number). While these types of policies are commonplace in the traditional financial industry, but the cryptocurrency community believes that these policies would be an invasion to the privacy that users strive to protect.