New AML/KYC Regulations Coming to Dutch Crypto Exchanges and Wallets

[PRIBO247]

A new regime of European Union (EU) banking regulations that
extend to cryptoasset exchanges and wallets has been
proposed as draft regulation in the Netherlands, and may become
Dutch law in Q1 of 2019. What will eventually be EU-wide
regulations are the fifth iteration/update to the bloc’s “ Directive,”
aimed at detecting and preventing money laundering and
terrorist financing through Eurozone financial entities.

According to the legal blog Regulation Tomorrow, the updated
policies of the directive pursue more transparency and
availability of ownership registers to EU authorities; less
possibility of anonymous transactions EU-wide; more scrutiny of
transactions to/from certain specified countries with weak anti-
money laundering (AML) or antiterrorism standards, or otherwise
opaque ownership registering practices; a centralized banking
register for all eurozone banks; “enhancing the powers of EU
Financial Intelligence Units” and more cooperation between EU
financial authorities.

Crypto In AML Directive’s Sights
The changes are notable intheir own right regarding the tension
between privacy and security in the EU. The final critical change
brought by the directive update however, is the new applicability
of all of the above to all cryptoasset custodial services, be they
exchanges or wallets. Any “digital representation” that can be
“transferred, stored and traded electronically” will now fall under
the directive.

This may mean that EU-based cryptoasset services exchanges
to increasingly impose AML and know-your-customer (KYC)
identity requirements on all customers, if they have not already,
in the lead up to the January 2020 deadline for the Directive’s
implementation. CryptoGlobe only yesterday reported on one
such instance, presumably anticipating the directive's
requirements.

A recent and extensive report on the use of cryptoassets for
criminal activities, compiled for the European Parliament (EP),
estimates that virtual assets are “misused” for over seven billion
euros worth of transactions - although this figure looks paltry
next to a 2015 FBI assessment , which said that $300 billion
worth is laundered every year just in the US.

The EP report stated that “AMLD5's definition of virtual
currencies is sufficient to combat money laundering, terrorist
financing and tax evasion via cryptocurrencies.”

Source: https://www.cryptoglobe.com/