Crypto Travel Rule in
De Nederlandsche Bank (DNB)
As monetary policy in the Netherlands is governed by the European Central Bank, crypto regulations have tightened. The Netherlands was the first European Union member state that required crypto companies to comply with the 5th Anti-Money Laundering Directive (5AMLD). The regulations require VASPs to provide identifying information on themselves and to their customers.
For example, the Netherlands required VASPs to collect further information before completing a transaction, such as proving beneficial ownership proof of a bitcoin wallet in November 2020. This measure was later repealed in May 2020, with crypto regulator De Nederlandsche Bank (DNB) reportedly acknowledging the need to apply a more risk-based approach to AML compliance.’ DNB’s willingness to experiment shows that the Netherlands seeks a manageable supervisory relationship that doesn’t upend the market or hurt small players.
1. Is cryptocurrency legal in the Netherlands?
Yes. There are currently no regulations that explicitly prohibit the use or trading of crypto assets in the Netherlands. However, cryptocurrencies are still not accepted as digital money.
2. Are there any AML crypto regulations in the Netherlands?
Yes. The Dutch National Bank (DNB) supervises crypto service providers’ compliance with the Sanctions Act 1977. The Ministry of Finance brought a law into force that subjected crypto service providers to the integrity supervision of De Nederlandsche Bank. The registration obligation follows from the Implementation Act amending the Fourth Anti-Money Laundering Directive. In addition to being required to register, this Act requires crypto service providers to comply with the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme - Wwft) and the Sanctions Act (Sanctiewet 1977 - Sw).
3. Is the Crypto Travel Rule mandated in the Netherlands?
The Crypto Travel Rule is not mandated in the Netherlands. However, non-custodial wallets are subjected to similar requirements due to the Sanctions Act (Sanctiewet 1977 – Sw) and the Regulation on Supervision pursuant to the Sanctions Act 1977 (Regeling toezicht Sanctiewet 1977 – RtSw). Both stipulate that providers of crypto services must take measures to ensure they adequately check, at the minimum, the identities of the persons or legal entities with whom they have a business relationship in their records, in compliance with the sanctions regulations.
4. Who regulates cryptocurrency in the Netherlands?
The Dutch National Bank (DNB) regulates cryptocurrency in the Netherlands. Their website reads, “DNB supervision focuses on countering money laundering and terrorist financing. This means we aim to prevent bitcoins and other cryptos from being used for illegal purposes such as money laundering or funding of criminal or terrorist activities.”
FATF Travel Rule requirements in the Netherlands
1. Are there licensing or registration requirements for VASPs in the Netherlands?
Yes. VASPs must register with De Nederlandsche Bank, from May 2020. For the time being, there is no registration requirement for entities that only exchange between virtual currencies, but the DNB advises that this may change in the future.
2. When does the Crypto Travel Rule go into effect in the Netherlands?
The Crypto Travel Rule is not mandated in the Netherlands; however, similar crypto-related AML regulations exist. From May 2020, VASPs operating within the Netherlands must register with the DNB and comply with similar sanctions screening requirements.
Complying with the FATF Crypto Travel Rule in the Netherlands
1. What is the minimum threshold for the Crypto Travel Rule in the Netherlands?
The Netherlands has not published their own minimum threshold to send PII to comply with the Sanctions Act of 1977–its comparable Crypto Travel Rule legislation. However, the Netherlands will likely defer to EU standards, which has recently removed the de-minimus threshold.
Read our EU's Transfer of Funds Regulation: 5 Key Takeaways [Apr 2023] to learn more.
2. What personally identifiable information is required to be shared for the Crypto Travel Rule in the Netherlands?
The De Nederlandsche Bank denotes the personally identifiable information required as follows:
During transactions to and from external wallets, VASPs must be able to effectively verify the identity of a party in a relationship with a person or legal entity referred to in the sanctions regulations.
Effectively, this means the following:
- The provider must establish the identity and place of residence of the relationship and screen it against the sanctions lists (and this must not produce a hit).
- The provider must take adequate measures to ascertain that this person or legal entity is actually the recipient or the sender. Compliance with this requirement may be risk-based.
3. Are there differences in customer PII requirements for cross-border transfers versus transfers within the Netherlands?
The Netherlands has not published specific differences in customer PII requirements for cross-border transfers compared with transfers from Dutch VASP to Dutch VASP.
4. What are the non-custodial or self-hosted wallet requirements in the Netherlands?
The Netherlands has opted to subject “unhosted wallets” to the reporting requirements of the Sanctions Act (Sanctiewet 1977 – Sw) and the Regulation on Supervision pursuant to the Sanctions Act 1977 (Regeling toezicht Sanctiewet 1977 – RtSw).
Why choose Notabene for Crypto Travel Rule Compliance in the Netherlands?
Our end-to-end Travel Rule solution is tailored to the compliance needs of our clients across jurisdictions. Notabene's wallet identification tool allows Dutch VASPS and Financial Institutions to perform proof of ownership verification when interacting with non-custodial wallets. Clients use our verified VASP directory with verified information to conduct counterparty due diligence before sending a transaction.
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