A Dutch Bitcoin (BTC) exchange has become one of the first casualties of a new regulatory procedure that requires many of the nation’s crypto-related companies to register with the central bank or close down.
The central bank, the De Nederlandsche Bank (DNB), has set a May 18 deadline for registration after the nation’s parliament voted in favor of adopting the EU’s anti-money laundering guidelines, as outlined by the Financial Action Task Force (FATF).
The long-running exchange, BitKassa, says that it will shut down on May 17, a day before the registration deadline. It also issued a scathing statement, decrying the government’s decision to impose “approximately USD 27,000 ([USD 5,400] registration fee plus almost [USD 21,600] in basic costs)” fees on all companies in 2020, “regardless of size.”
The FATF has stated that government financial regulators should enforce a compulsory registration system, not unlike that used in Japan, where over two dozen exchanges have registered with the regulator.
However, BitKassa stated that per its calculations,
“Dutch [crypto] companies will have to pay [USD 1.8 million] in total, for less than 8 months of regulation in 2020 alone. On average this is more than trusts or credit card companies are paying. This is [a killer] for startups.”
The exchange pointed out that, in an official post, the DNB had conceded that it would be “optimistic” to expect that all 75 of the nation’s crypto trading and custody companies would be able to afford the fees and costs.
“We have no confidence at all that these annual costs will be less next year,” wrote the exchange.
And the trading platform signed off with another barb aimed at the DNB, writing,
“[In the future,] we are very likely still to be involved with Bitcoin in one way or another. But that’ll be with projects not subject to central bank regulation.”
The new regulations pertain to companies that conduct crypto-to-fiat transactions (and vice versa), and those that provide cryptoasset custodial services, although companies that exclusively engage in cryptocurrency-to-cryptocurrency business are exempt.
Twitter users expressed their outrage, with one dismissing the DNB’s regulation fees as “ridiculous,” and accusing the central bank of “murdering” fintech innovation.
Another legendary Dutch Bitcoin company is forced to shut down due to ridiculous “registration fees” by the Dutch C… https://t.co/CAq76HlF0J
— Brrrrrr Brrrrrr ☣️🎙️🎮🕹️ (@GKBoris)
Meanwhile, in April, the DNB admitted that (unspecified) parts of Bitcoin’s underlying technology could be used in creating a new type of currency.