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Bitonic files preliminary injunction to be relieved of wallet-verification requirement

On November 17, 2020, the Dutch central bank (DNB) granted Bitonic a registration as a provider of cryptoservices. The registration was made conditional and required the introduction of extra control measures to verify the possession and use of wallets and crypto-adresses. We introduced these measures under protest and explained that in our in view, the requirement lacked a proper legal basis. This is confirmed by an independent expert advice by Bökkerink Compliance International, that we received this week.

We did not receive a convincing answer to the fundamental questions we raised on this matter during the registration process. In addition, we are also still awating a reply to a letter to DNB, sent in early November 2020 by 25 of the 38 registering parties. Meanwhile, we are for some time now, forced to work in a way that violates privacy rules. To avoid doing so, we asked DNB again, early this year, to revoke the requirement. This request was denied with a referral to the Sanctions Act. However, we do not agree with that explanation.

We believe it is of crucial importance that a judge considers DNB's position so that it becomes clear whether the requirements are legitimate. To clarify: the regular legal obligations are not under discussion. Our concern lies with the additional wallet-verification requirement set by DNB on 21 September 2020 and the way in which this was enforced in the registration process.

That is why we decided this week to urgently file a preliminary injunction at the court in Rotterdam in order to suspend the wallet-verification requirement of DNB. Our objective is to be able to quickly halt the comprehensive processing of personal data imposed on us. We want to return to the situation where we ourselves determine, on a risk-based basis, whether we ask the customer to prove his management of the wallet.

We believe integrity is important. We believe that integrity means that we comply with anti-money laundering and sanction rules as well as with privacy regulations. In addition to adhering to investigation laws, we also see it as a legal obligation to respect human rights.

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