De Nederlandsche Bank (DNB), the Dutch central bank, will be tightening supervision on companies offering cryptocurrency related services in the Netherlands as of January next year.
“Cryptocurrencies vulnerable to financial crime.”
In an official press release on September 3, DNB stated that as of January 10, 2020, providers of cryptocurrency related services will fall under the integrity supervision of the Dutch central bank.
According to DNB, these companies, which offer services for the exchange between digital money (cryptocurrencies) and regular money (fiat currency) and companies that offer cryptocurrency wallets, must start their preparations well in advance.
DNB is happy to enter into discussions with these cryptocurrency related companies about the integrity supervision. DNB therefore calls on all companies that (want to) carry out these crypto activities, to report to DNB by means of a registration form.
Based on these reports, DNB can reach these companies more easily later on and an inventory will be made of the size of the group of companies that will be placed under supervision.
According to the press release, DNB is required to start the new integrity supervision under the fifth European anti-money laundering directive (AMLD5) and its implementation in Dutch law. According to AMLD5, cryptocurrencies are vulnerable to financial economic crime and therefore it is important to set up integrity supervision now.
In short, the integrity supervision means that companies which offer cryptocurrency related services must be registered with DNB. Also their board members and some shareholders (qualified shareholdings) will need to be assessed. They must be able to demonstrate that the processes are effectively designed to prevent money laundering and terrorist financing, and that board members and other policymakers adequately manage these processes.
Once a company is registered and the board members have been assessed, DNB will continue to ensure that the companies comply with the rules on money laundering and terrorist financing. Companies that do not register with DNB, will no longer be allowed to provide any cryptocurrency related services.
The DNB website provides answers to a number of important questions about DNB’s new integrity supervision. More information will be added in the upcoming weeks and months.
The European directive states that the duty to register must take effect no later than January 10, 2020. It could also apply from a later date, however, depending on the exact timing of the directive’s implementation into Dutch law. The legislative proposal for implementation is now before the Dutch House of Representatives.
Both DNB and the Dutch Authority for the Financial Markets (AFM) have regularly warned against the integrity risks associated with cryptocurrencies. They were both in favor for crypto regulation in January 2019.
According DNB’s website, supervision is one of DNB’s main tasks and in the fulfilment of all its various tasks, DNB tries to put into practice its mission: Working on trust.
That is why DNB supervises banks, pension funds, insurers and other financial institutions. DNB pays specific attention to the financial position and quality of the management board. It is important that institutions stick to agreements with their customers. Supervision reduces the chance that an institution ends up in difficulties, but it is no guarantee.
The combination of supervision and DNB, however, is a pretty strange or weird combination, which will sound as a bad joke to many Dutch people, not to mention the noted mission of “working on trust”.
All Dutch banks, including ABN AMRO, ING and Rabobank, have been under DNB’s supervision for many years now. And confidence in these Dutch banks has been lost for many years now, thanks in part to DNB’s so-called “supervision”.
Money laundering, corruption and fraud scandals are synonymous with Dutch banks. And DNB, their supervisor, stands by, acts like a puppet and just hands out another fine of a few hundred million euros.
In short, Dutch banks apparently take DNB’s advice too seriously, by strictly stick to the “agreements” made with their “customers”. So the bank manager dressed up in a three-piece suit and “approved” by DNB, must simply maintain the agreements made with a Mexican drug cartel, for example. Because at the end of the day, we are working on “trust”.