Netherlands: AML conditions for crypto business

Not too long ago, some providers of crypto services in the Netherlands became obliged to comply with anti-money laundering requirements. The reason for this is the Fifth Anti-Money Laundering Directive (AMLD5) issued by the Dutch House of Representatives last year.

Let’s now explore the details of the control exercised over AML compliance of crypto service providers. This information will come in handy for those who plan to register their own crypto company in the Netherlands.

The new rules

The new rules stated by the Directive apply to companies that offer:

  • Custodial wallets;
  • Virtual currency and fiduciary exchange services.

To offer their services legally crypto companies with DNB now need to register in the Netherlands.

COREDO specialists will be happy to reply to any of your questions connected to company registration. We will also inform you about all aspects of obtaining a license for crypto businesses in the Netherlands.

The new conditions of offering exchange services and depository wallets apply to you if you:

  • Live in the Netherlands or have an office there;
  • Offer these services from another EU country;
  • Come from the Netherlands and provide only international services.

Non-compliance consequences

It is known that digital currencies are created on the principle of anonymity. However, it actually builds a place for possible criminal abuse.

This is the reason why in case the provider violates the requirements of the Directive or of the Sanctions Act, the regulator has a right to deregister them. Once the sanctions are applied, everyone has a duty to comply with them.

For entrepreneurs who are interested in opening a crypto exchange in the Netherlands, it is important to consider additional obligations that the Sanctions Act puts on some regulated institutions. These obligations are:

  • To manage the administrative organization and perform internal control;
  • To save the accounts of the respective contacts in a form of notifications and transactions for five years from the moment when sanctions had been imposed (even if the individual is not active anymore).

In addition, a cryptoasset service provider in case of a “hit” must freeze the related contact’s financial resources and stop the provision of any financial services or resources to that contact.

In case the company fails to deliver these obligations, it will mean, firstly, the cancellation of the company’s registration and termination of its activity, and, secondly, the impositions of severe administrative fines. Even criminal prosecution can be a result of rule violations. Consequently, it is crucial to follow all the prescribed rules on sanctions while providing crypto services in the Netherlands.

Still have any questions about crypto regulation in the Netherlands? Just contact our team. Experts from COREDO are ready to provide with a personalized consultation on this issue.