Reports in the Netherlands claim that the Minister of Finance of Netherlands, Pete Hoekstra has been suggested a proposal that could help eliminate unidentified activities in the crypto market which is to introduce a licensing system on crypto operations in Netherlands.
The increase of anonymous buying and selling of crypto assets in Netherlands forced the Minister of Finance to seek help from financial authorities and De Nederlandsche Bank, a central bank in Netherlands so that a solution could be derived to end the anonymous trading of crypto assets.
An effective solution was proposed to Mr. Pete Hoekstra which was actually a step back for the crypto industry in Netherlands as organizations and exchanges would have to apply for licenses in order to acquire crypto assets or else they might face punishments.
Netherlands’ Minister of Finance announced that as soon as he received the proposed solution for eliminating anonymous activities in the crypto market, he started working on its implementation. As the report highlights, since the saga of spectating the performance of crypto assets for investment point of view has played down recently, there has been a shift from protecting investors’ wallets to focusing on eliminating fraudulent activities such as money laundering and terrorist financing through crypto assets which at the moment seems to be the bigger problem for authorities.
The Netherlands Financial Intelligence Unit also saw a boom in the number of unidentified activities using cryptocurrencies in a year’s time recorded at an increase from 300 to 5,000, reported by a source. This shows how spectacularly anonymous buying and selling of crypto assets has increased and how urgent was the need of an implementation that could end this issue.
The new licensing system would encourage organizations and exchanges to report to the regulatory authorities if they may examine any dubious activity from their customers. Moreover, the organizations and exchanges will be responsible for acquiring all consumer information in case of requirement for investigation by the authorities, This licensing system would be a far more organized and protected system than the current practices being followed in the crypto market surely. It will also help in the tracking of fraudulent activities and leading to sources indulging in such activities.
Before providing the organizations and exchanges licenses to operate in crypto assets, the Netherlands’ central bank affirmed that they will be examined to conclude whether or not they have the capabilities to acquire necessary consumer information. The procedure might help authorities narrow down the possibility of any unidentified activity in the crypto space.
As many see this new system introduction as a helpful process against unidentified activities, there are opinions that this is a major step back for the industry. A board member of the Bitcoin Nederland Foundation, Richard Kohl believes that the licensing procedure is “dramatic for young innovative companies”, saying that this new system means increased expenses and paperwork for organizations to stay in order with the regulations, which puts them at a huge disadvantage against the financial market competitors, banks.
Mr. Kohl holds the opinion that not enough research has been done on the issues relating digital currencies and that the introduction of the licensing system means that the government has taken extreme steps against the anonymous buying and selling of crypto assets. Furthermore, he raises the point of the possible outcome of gathering consumer information for investigation purposes, saying:
Banks and financial institutions already need to keep track of customer and transaction information […] you may wonder how well our personal information is protected and used, such as how the Chinese government wants to be able to follow all transactions of all citizens.
The Bitcoin Nederland Foundation board member claimed that the idea of storing consumer information is not a very wise one since the job is already done by banks but in contrary, there are opinions that in doing so, authorities can track the parties involved in fraudulent activities using crypto assets more easily due to access of information. Thus, the new licensing system has its positives and negatives just like every other thing but the difference lies in individual opinions.