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Crypto wallet verification law: Dutch Bitcoin exchange, Bitonic, sues Central Bank

Cryptopolitan


TL;DR Breakdown

  • Bitonic sues Dutch Central Bank.
  • The bank had mandated crypto exchanges in the country to enforce a strict KYC policy.

In Netherland, Bitonic, a Bitcoin exchange, has sued the country’s Central Bank over its new crypto wallet verification regulation. The exchange asks the courts to grant it an injunction that would see to the suspension of this rule.

Bitonic sues Dutch Central Bank

The Dutch Central Bank, De Nederlandsche Bank, had demanded that all operating crypto exchanges within the country enforce a strict Know-Your-Customer policy. This was around November of last year, with the policy covering required verification steps for withdrawal wallets. Bitonic labels this regulation a “nuisance.”

Then, Bitonic was one of the few firms licensed by the bank to carry out crypto exchange activities. The authorities had approved only three out of the 38 applications for this license. Regardless of this, 25 of these exchanges sent a joint letter to the bank in which they demanded that more clarification be provided for the strict regulation.

Bitonic restated the demands for this clarification and said that a brick wall had met its repeated efforts to get the bank to clarify the KYC rule. It further added that an independent compliance firm it hired had said that the bank lacked any legal backing to give such draconian laws.

The goal of the lawsuit is to reinstate the old order

The crypto exchange says the KYC policy infringes on existing customer privacy laws. It is essential that a judge needs to wade into the matter to determine if the bank’s demands are legitimate. Bitonic said its goal is to return to the earlier framework where the exchanges were the sole determinant of whether a client needs to provide his KYC details or not.

A spokesman for the firm says the exchange was left with no choice but to seek redress in a law court as DNB has been very reluctant to discuss its regulations. He went on to add that his firm had the support of other exchanges in this ensuing lawsuit.



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