Dutch Financial Institutions Required to Register for Virtual Currency Exchange Services
Amsterdam, Netherlands - A New Requirement from the Dutch National Bank
The Dutch National Bank (DNB) has announced that financial institutions offering professional exchange services for virtual currency, also known as cryptocurrency, must register with the DNB under Section 23b of the Anti-Money Laundering and Combating Terrorism Financing Act (AML CTF Act).
What Institutions Must Register?
- Financial institutions that facilitate the exchange between virtual currencies, such as Bitcoin or Ethereum, and fiat currencies, like the Euro.
- Providers of digital wallets for cryptocurrency.
Non-Fungible Tokens (NFTs)
While NFTs are not explicitly covered by the AML CTF Act, it may still apply to those who trade in NFTs, particularly if they are works of art. Art dealers and collectors who professionally buy or sell art objects worth more than €10,000 must comply with the act’s requirements.
Compliance Requirements
Financial institutions and designated businesses must:
- Establish risk assessment procedures
- Perform customer due diligence
- Maintain compliance programs under Section 2d of the AML CTF Act
- Appoint a day-to-day policy maker responsible for ensuring compliance with the act
Reporting Unusual Transactions
Financial institutions are obligated to report unusual transactions to the Dutch Financial Intelligence Unit (FIU) under Section 16 of the AML CTF Act. Transactions may be considered unusual if they exhibit objective and/or subjective indicators of money laundering or terrorism financing.
Cross-Border Transactions
The DNB has also clarified that cross-border transactions, including those involving foreign shell banks, fall within the scope of the AML CTF Act and must be reported accordingly.
Conclusion
Financial institutions operating in the Netherlands must ensure compliance with the AML CTF Act by:
- Registering for virtual currency exchange services
- Maintaining customer identification and due diligence procedures
- Reporting unusual transactions
- Implementing robust risk management measures
Failure to comply may result in criminal or civil liability.