Proposed licensing system to keep anonymous Crypto trading at bay, claimed by Dutch Government
As per recent news from the Dutch media group, Nederlandse Omroep Stichting (NOS), the Dutch Ministry of Finance has received an official confirmation to set up a licensing system which would create transparency as far as the digital asset trading and crypto-based services are concerned.
Pete Hoekstra who is the Netherlands’ Minister of Finance has asked for a special report on the various operations of crypto markets and several trading platforms which are currently in use from the Netherlands’ Authority for the Financial Markets and De Nederlandsche Bank which is the local central bank of Netherlands
The minister in a press meet claimed that he has already planned his operation by the outcome of the report and have taken it up seriously. As per the report, the down surge in crypto space speculations has made to take up investor’s protection action lightly in the recent times. The consequence on the aftermath of this less stringent action is that emphasis has been put on the prevention of laundering of money and terrorist financing through trading in crypto industry.
In a recent report by the Netherland’s Financial Intelligence Unit, it was found out that the number of unusual and illegitimate transactions in the digital asset space has increased at an exponential rate from a meager 300 up to 5,000 last year.
The proposed licensing system once introduced is expected the crypto exchanges and wallet providers to monitor and record their customers’ transactions and bring to the notice of the authorities if any suspicious activity is found. The exchanges are also required to collect and store all trading related information of their customers and provide to the authorities during the instance of an investigation.
procedure on their operation. The bank authorities have confirmed that they would ensureThe Netherland’s central bank has been asked to follow a systematic that the companies will be scrutinized and tested before the license are issued. Recently, the bank has conducted an exercise to check if they are competent enough to collect the required user data in times of need.
Richard Kohl who happens to be a board member of the Nederland Foundation for Bitcoin claimed that the step taken would not be something conducive for the young innovative companies and would be a backlash on the face of local innovation and culture
Kohl believes that the new stringent law would bring in an inconsiderable amount of manual-based paperwork and rising cost to the companies for staying compliant with the new regulated system. Once inducted into the system, these would cause major competitive disadvantages when compared to large financial established bodies like banks and other financial institutions. He even believes that not much research has been done when setting the process considering the actual dangers which can be brought on by cryptocurrencies with stringent measures taken which are too extreme. He also expressed his concerns over the feasibility of data storage and its privacy and other possible dangers associated with storing of such sensitive data.
As per a report from a daily publication last December, all digital assets and cryptocurrency-based service providers would be required to get licenses from the central bank of the Netherlands for their business operations.
Earlier in August’18, there was a news break that one of the top officials of the Dutch central bank had claimed that since cryptocurrencies are not considered as real money, the bank has not resorted to any plan of banning them.