Registration process Bitonic

As you have probably heard, a legal registration for Bitcoin companies in the Netherlands is required since 21 May 2020. Naturally, Bitonic has been well prepared for this and our request for registration with the regulator DNB (Dutch Central Bank) has been submitted on time.

As a result of the European anti-money laundering directive being implemented in the Dutch Wwft law, we are obliged, among other things, to identify customers and to monitor transactions. To comply with this in the best possible way, we have developed a verification system including Android and iPhone apps, to make this transition as smoothly as possible for you as a customer.

There is a 6 month transition period starting from entry into force, in which DNB has the time to register existing parties. The transition period therefore ends on 21 November 2020. That is why it's essential that we, but also all other crypto companies operating in the Netherlands, have to be admitted to the register before that date or otherwise close for business.

Sanctions Act

In addition to identification and verification, we must also adhere to sanctions. This means we make sure our customers do not occur in (inter-)national sanctions lists, in order to prevent us from doing business with sanctioned entities, such as terrorist organizations. We have been doing this for several years, and during that time we have never had a positive hit; something which is not surprising because our customers have also already been screened by their bank.

Which is why it came as a big surprise that The Dutch Central Bank (DNB) told crypto companies via a webinar on 21 September 2020 about an additional technical requirement for verifying crypto addresses under the Sanctions Act. In fact, this requirement was so strict that, according to DNB, no registration would be made if it was not met.

Apart from the fact that this requirement was only communicated after 4 of the 6 months of the transition period had already passed, there is in our opinion no legal basis for it. An opinion that is shared by legal experts in this field. Similar requirements are also not applied to financial institutions such as banks supervised by DNB.

Dutch Bitcoin Trade Association

We have been in contact with the Ministry of Finance as regulator about this new requirement, they informed us DNB did not consult with them and otherwise refer to the central bank as supervisor. An invitation from the VBNL (Bitcoin Trade Association) to DNB for further consultation was however rejected.

Now that an unworkable requirement is suddenly on the table, the supervisor is not available for talks with the trade association, and with less than 3 weeks left before the deadline only one of the thirty-eight companies has been registered, the VBNL sees no other option than to send an open letter to politicians and the press to get out of this impasse: Letter from VBNL to DNB (Dutch)

Bitonic, as one of the co-founders of VBNL, endorses this letter. We are still confident that the Dutch government and supervisors do not want to deliberately push innovative, compliant companies out of the market. And we therefore trust that the registrations will be granted on time, in the interest of all Dutch crypto enthusiasts.

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