The Netherlands is known for cycling, canals, windmills and cheese. What is less known is that buying bitcoin in the Netherlands a very regulated matter is. It is easier to buy a joint then a bitcoin.
The Dutch Central Bank (DNB) is making sure bitcoin is not acquired or used for illicit activities. In the Netherlands crypto exchanges and brokers have in 2021 adapted to new regulatory changes. These changes, which went in effect on the 17th of November 2020, require crypto services operating in the Netherlands not only to comply to the European Fifth Anti-Money Laundering regulation (AMLD5), but also the provisions of the country’s Sanction Act 1977.
Exchanges, brokers and all other services for exchanging cryptocurrencies into fiat money operating in the Netherlands are requited to ask for more information from their clients on the wallet-address they use to withdraw the funds. Clients must prove they are the legitimate owner of the bitcoin address by verifying this by uploading a screenshot from the wallet, or by signing a message.
Why is this required by the DNB? According to the Sanctions Act 1977, a crypto service provider must now check whether a client and any ultimate beneficiary owner (UBO) is on a sanctions list and report this to the Dutch Central Bank (DNB) if this is the case. The Dutch Central Bank (DNB), which is enforcing these regulations, also regulates the service providers. Exchanges and brokers operating in the Netherlands are required to register at the DNB. A registration does not imply these services are licensed by the DNB only that these services are compliant with the Dutch regulatory requirements. DNB calls on crypto service providers to apply for registration.
At the time of writing this article there are 15 service providers that obtained an official DNB registration. The Dutch Bitvavo exchange and brokers like for example Amdax, Anycoin Direct, Bitonic, BTCDirect, Blox, Bitmymoney, Coinmerce and Satos have all obtained a DNB-registration.
Thus, buying bitcoin in the Netherlands is strictly regulated. The Dutch bitoin sector must adhere to the strict interpretation of the AMLD5 and the national Sanction Act. Customers that buy bitcoin at a DNB-registered crypto service provider are buying bitcoin in a regulated manner which helps when declaring bitcoin ownership to the tax agency. The risk is that Dutch bitcoin service providers become less attractive and competitive for foreign clients abroad. For more information on buying bitcoin in the Netherlands visit bestebank.org.