The Dutch Ministry of Finance’s implementation of the European Union’s fifth anti-money laundering directive, or AMLD5, requires the country’s Central Bank to monitor its cryptocurrency industry.
The cost of this supervision will be passed on to crypto-based businesses. A recent report suggests that these new compliance fees will be higher than those paid by traditional trust and credit card companies.
One directive, twenty seven varieties
AMLD5 was supposed to bring increased transparency and a unified approach to anti-money laundering measures across the EU. But the varying member states have each implemented different interpretations of the directive, often prioritizing their own interests.
In the Netherlands, for example, the Ministry of Finance has been accused of overreaching its authority over the appointment of the Dutch central bank, or DNB, to supervise cryptocurrency companies.
Local lawyer, Frank ‘t Hart, has been investigating how the Finance Ministry has presented its proposals to the Dutch parliament.
“This is much more than what the [AMLD5] has indicated. This envisaged way of supervision is unusual.”
Not just unusual, but expensive too
Even before AMLD5 came into effect in January, many were critical of the Dutch authorities’ approach to the directive. Futures and options exchange, Deribit, moved operations to Panama, and the SimpleCoin mining pool closed down completely, in order to avoid compliance with the new rules.
Now that more information about the proposal has been made public, it appears that around fifty Dutch crypto companies will be expected to pay €1.7 million ($1.8 million) in fees for the central bank supervision.
As an example, for Bitkassa, a company which only employs three people, the fees would amount to €34,000. This is considerably higher than trust and credit card companies will have to pay.
The Dutch Association of Bitcoin Companies is canvassing all relevant parties to point out that “performing supervision with an intensity that exceeds trust offices and credit card companies is not really a risk-based approach.”
Prior to the COVID-19 pandemic, the measures and additional costs were being discussed in the parliament’s first chamber, which is the last stage before proposals become law. If such measures are passed into law, they may cause a high number of crypto-related businesses to close.