Netherlands call to introduce crypto regulations

Mar 10, 2018

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Wopke Hoekstra, Dutch Minister of Finance, told the local parliament in a that both a national and an international approach is required to regulate the crypto market in order to reduce the risks associated with Bitcoin and other digital currencies.
“Investing in cryptocurrencies is not without risk’ Hoekstra said. ‘In contrast to savings, money put into cryptocurrencies does not fall under a deposit guarantee system and there is generally no central issuer to claim from in the event of abuse.”

Hoekstra has a proposal ready saying that local cryptocurrency services and exchange platforms would need to register with the government to provide the know-your-customer (KYC) information by the end of next year. He also proposed new laws to protect customers from ICO scams that have been happening in the past. The minister is trying to put measures in place that bans advertising that is targeting the ordinary people by promoting these ‘risky financial products’ – as Hoekstra emphasized. Moreover the proposal details the need for close cooperation with credit card companies in order to warn the customers about the risks of buying digital currencies with credit. According to the improved transparency is also a very important detail therefore a fresh anti-money laundering legislation is about to be introduced as well.

These are the follow ups for the statement issued by the Netherlands Authority for Financial Markets (shortly AFM, which is mainly the Dutch SEC) last November. AFM talked about the lack of transparency back then, and called ICOs a ‘dangerous cocktail’ that promise high returns in a highly volatile market which is easily manipulated.

We still believe that reasonable regulation could be a healthy thing for crypto, but it is really important to consult all parties involved: startups, financial regulators and potential investors.

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