Netherlands Central Bank to Regulate Crypto Exchanges to Prevent Money Laundering
De Nederlandsche Bank, the Dutch central bank, plans to regulate digital currency firms by demanding they register and acquire valid licenses to start operating.
central bank hopes the measure will prevent money laundering and the application of cryptos to finance terrorism, according to
De Telegraaf – a Dutch daily newspaper. To be eligible for a license, digital currency firms must report anomaly transactions and try to understand who their clients are.
The bank revealed that the regulation was important since the decentralised, faceless nature of the digital asset makes it a major target for illicit money launderers.
An investigation showed that over $88 million has been successfully laundered in around 46 crypto exchanges across the world since 2016.
Crypto Sector Liable to Money Laundering
ShapeShift AG, an altcoin exchange service, purportedly processed over $9 million in malicious funds in the past two years. The exchange recently enabled people to trade bitcoin and other major cryptos undercover, although it has adopted compulsory KYC since then.
According to the Q3 Crypto Anti-Money Laundering (AML)
report conducted by CipherTrace, money laundering through digital assets is a big concern. The total number of bitcoin that have been laundered are currently at 380,000
CipherTrace further reported that exchanges based in nations that have weak AML laws hold 97% of illegal bitcoins. However, the research shows that activities related to money laundering through cryptos correlate to AML regulations and how best they are exerted on crypto exchanges.