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Grace Period For Crypto Firms Ends In Netherlands

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As of now, Dutch crypto firms could face penalties should they not fall in line with the new anti-money laundering, or AML, laws that were passed on the 21st of April by the Dutch Upper House. With the deadline having been the 18th of May, 2020, any unregistered crypto firm is running the risk of violating the new laws of the Netherlands.

Time’s Up!

This new set of laws aptly named the Anti-Money Laundering Directive, mandates companies that offer custodial or crypto-to-fiat services to be registered as of yesterday. This, however, only applies to firms mentioned above, and crypto-to-crypto services are exempt from such registration.

The Dutch Bank, or DNB, is the entity in charge of the financial activity regulation within the country. As one would assume, the DNB is mandated to comply with the Dutch government’s new directives. However, the DNB will not issue out licenses to crypto businesses. Instead, paid registrations will be mandatory and will cost people up to €34,000 a year.

Following A Paper Trail

These crypto firms will instead be under the supervision of regulatory authorities, and this will stretch over to their directors, as well. Thus, the new legislation mandates companies to establish risk profiles, as well as strengthen their Know-Your-Customer (KYC) rules, in order to assign each risk profile.

Alongside this, all transactions will be in a state of continuous monitoring and would be reassigned to various risk profiles if deemed necessary. Furthermore, any transaction that is considered to be “suspicious” is mandated to be reported to the Financial Intelligence Unit.

Warnings Of Repercussions

The DNB had issued a warning in regards to companies that have yet to submit a draft application before the new laws were put in force. If they had not submitted an application, these companies could not make use of transitional arrangements. Thus, the DNB stated that all operations must be ceased, and continued activities without a transitional arrangement will affect the company’s subsequent registration application. Furthermore, operating without transitional arrangements makes a company liable to enforcement actions by the DNB.

The implementation of the AML5 legislation made by the European Union has been subject to many countries within the Netherlands. This is due to the costs that would have to be paid by crypto firms should this legislation be put in place within the country. Thus, it’s still a matter of controversy within the country.

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