Dutch Central Bank reverses decision on tighter checks for crypto withdrawals
May 20, 2021, 11:52AM EDT
2 min read
The Dutch Central Bank, DNB, has reversed its decision to enforce stricter measures for withdrawing cryptocurrencies from exchanges, according to Dutch crypto exchange Bitonic.
In January, the central bank set out rules that required crypto exchanges to collect additional data from their users when they withdraw cryptocurrencies. Namely, users had to add the recipient address — where they are sending funds to — to their whitelist and provide a photo to "prove" that they indeed owned the address. Crypto exchanges in the region, such as Bitstamp and Bitonic, swiftly started enforcing the requirements.
The central bank's reversal on the policy comes almost two months after Bitonic filed an objection over the stringent rules. "Aside from the fact that verifying every address for every transaction has no technical merit, it is also a serious violation of our customers' right to privacy," Bitonic said, in a statement when it filed the complaint in March.
In April, the Preliminary Relief Judge of the Rotterdam District Court ruled that the crypto exchange had every right to challenge the new requirements and that DNB must consider Bitonic's objections and make a decision within six weeks.
DNB has now said that the original requirement "does not do enough justice to the discretion that an institution has to implement this standard in a risk-oriented manner." It declared the objection well-founded and revoked the wallet verification requirements.
The central bank still requires crypto exchanges to take adequate measures to check that the person withdrawing the funds is actually the recipient. But it has added a clarification to the official guidance that states providers are able to choose the verification methods that suit them and their customers, rather than having to follow any specific measures.
Bitonic stated that it was pleased with the outcome and will be removing the wallet verification measures as soon as possible.
Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.