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Coinbase introduces KYC rules for its Netherland users to comply with local legislation

24 Jun, 20223 min readEthereum
Coinbase introduces KYC rules for its Netherland users to comply with local legislation

Coinbase announced its Netherlands users would have to comply with KYC rules when making transfers to wallets off Coinbase. It stated that the rule would bring its operations in compliance with local regulations.

The country’s 1977 Sanctions Act requires financial service providers to verify the identities of transacting parties on its platform. The mandatory requirement is, therefore, to ensure AML/CFT in financial transactions.

As a result, users making transfers to wallets off Coinbase will have to provide information about the transaction. This includes the recipient’s full name, the purpose of transfer, and the recipient’s residential address.

It, however, stated that the latest introduction would not affect the usual transactional experience on the platform.

Meanwhile, Coinbase has made similar announcements to abide by local regulations in other countries. In March, the company announced that it would start tracking off-platform transactions executed by users in Canada, Singapore, and Japan.

Rising crypto restrictions

Regulators in the Netherlands have recently called for increased regulation of the space, with some asking for a total ban.

Pieter Hasekamp, director of the Dutch Bureau for Economic Analysis, made a call for a total ban stating that the country must curb the crypto hype. He claimed that the use of cryptocurrency constitutes security concerns, fraud risks, and scams.

Likewise, Paul-Willem van Gerwen, head of Capital Markets and Transparency Supervision at the Dutch Authority for Financial Markets (AFM), ruled digital assets as unsuitable for payments or investments.

He expressed similar concerns about crypto markets’ transparency and susceptibility to manipulation and other criminal activity.

However, pending the implementation of the EU law, Markets in Crypto Assets Regulation (MiCA), the AFM doesn’t have powers over the crypto markets.

Europe is increasing its regulatory pace.

The Markets in Crypto Assets Regulation (MiCA) proposed in 2020 is the EU’s response to the need for an encompassing regulation for digital assets. The increased market volatility has heightened calls for a regulatory framework for digital assets.

The tripartite of the European Commission, the European Parliament, and the 27 member states constitute the bodies negotiating the MiCA. According to a report by Bloomberg, the negotiators recently met in June and are expected to meet again by June 30 to get the rule ready in time for France’s six-month rotation in the presidency.

The European Commissioner Mairead McGuiness has also called for hastened negotiation and compromise on the rules. She stated that the TerraUST crash and Russia’s alleged use of crypto assets to evade sanctions have made the rules more urgent.

Likewise, Verena Ross, the head of the European Securities and Markets Authority, made a similar call in May. She appealed for the quick completion of the crypto rules, which she said she was waiting for “with great impatience.”

Abdulrasaq is a blockchain maximalist who believes that technology is necessary for the future we are heading to. He is an ardent researcher, and writer who uses his writings to inform about the prospects in the blockchain space. He spends his free time writing movie scripts and combing the corners of Quora.

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