Crypto Companies Win Partial Victory Over Dutch Central Bank

October 10, 2023
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Crypto-asset firms, including Binance successors Coinmerce and Bitvavo, have claimed a partial legal victory in their battle against the $2.3m fees imposed by Dutch regulators.

Crypto-asset firms, including Binance successors Coinmerce and Bitvavo, have claimed a partial legal victory in their battle against the $2.3m fees imposed by Dutch regulators. 

A Rotterdam court has ruled that De Nederlandsche Bank (DNB) — the country's central bank — exceeded its legal authority when requiring crypto companies to register for anti-money laundering (AML) purposes. 

The court stated that DNB's assessment of registration requests contradicted the obligations outlined in EU's AML laws.

This means that it is unlawful to charge supervisory costs to crypto-asset service providers for the year 2021 under current regulations.

“It is not possible to lawfully charge the supervisory costs for the year 2021 to the crypto service providers based on the currently applicable regulations,” the court said in a statement.

“The court itself has provided for the case and the decisions of DNB in ​​which it charges the supervisory costs for this year to the crypto service providers charged, revoked,” the court concluded. 

Bert de Groot, chair of the United Bitcoin Companies in the Netherlands (VBNL), welcomed the decision when approached for comment. 

“The VBNL is satisfied that the court has found that the registration obligation as resulting from the European AMLD5 has been violated in the Netherlands,” he said. “The court strikes down various articles in the act and describes that DNB has therefore unlawfully carried out in-depth preliminary assessments.”

The court disagrees with some arguments

The crypto companies have only secured a partial victory though.

The crypto-asset service providers argued to the court that the registration regime under which they have been subject since 2020 does not intend to pass on the supervision costs to them and that they cannot be regarded as persons under supervision.

“The court does not follow the crypto service providers in this,” the court concluded.

“In the opinion of the court, the introduction of the registration obligation for crypto service providers is not related to the passing on of the supervision costs to them and, in view of the relevant legal provisions, they must be regarded as persons under supervision.”

The court also didn’t support the crypto-asset service providers in their position that the legislation and regulations on which the passing on of supervision costs is based "is contrary to general legal principles or the general principles of good governance”.

Dutch central bank eyes the ruling

When approached by Vixio for comment, a spokesperson for the DNB said that the institution has “taken note of the ruling”.

The DNB spokesperson acknowledged that an initial analysis of the ruling indicates that as far as registration of crypto service providers is concerned, the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act provisions implemented by DNB are not binding, as they go beyond the EU’s fifth Anti-Money Laundering Directive (AMLD5). 

“This would imply that the basis for the supervisory fees we charge is not binding either,” the spokesperson said. “DNB is thus in compliance with Dutch laws and regulations, but the court has declared those laws and regulations non-binding because they apparently conflict with European rules.”

Discussing the other ruling the DNB spokesperson welcomed the fact that all objections against the central bank were unfounded.

“We welcome this conclusion, because it confirms our mandate to provide adequate money-laundering supervision of the crypto sector as well, and that of course benefits society,” said the spokesperson. 

The regulation will now enter into consultations with the Dutch Ministry of Finance on this matter. 

Coinmerce and Bitvavo have not responded to Vixio’s request for comment at the time of publication. 

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