Dutch Bitcoin Exchange Takes Central Bank’s KYC Requirements To Court 101
Source: Adobe/momosama

Dutch bitcoin (BTC) exchange Bitonic has filed for a preliminary injunction at a Rotterdam court in a bid to suspend a wallet verification rule enacted by the De Nederlandsche Bank (DNB), the country’s central bank. The platform said its decision is motivated by the fact that the imposed know your customer (KYC) requirements force it to violate the privacy of its users.

Last November, the DNB registered Bitonic as a provider of cryptoservices, making the registration conditional and requiring the platform to introduce special control measures. These were to be used to verify the possession and use of wallets and crypto-addresses by Bitonic’s customers.

At the time of the registration, the exchange claimed it was obliged to verify user identities through passports, ID cards, and/or driving licences, and link BTC wallets to identities similarly to how banks set up individual bank accounts for their customers.

Also, DNB requires that in “transactions to and from external wallets, crypto service providers must be able to effectively screen the identity of a relationship with a person or legal entity as referred to in the sanctions regulations.”

“We introduced these measures under protest and explained that in our in view, the requirement lacked a proper legal basis. This is confirmed by an independent expert advice by Bökkerink Compliance International that we received this week,” the platform said. Bökkerink Compliance International says it is a Netherlands-based consultancy and advice company in the area of compliance and integrity with a focus on the financial and non-financial sector.

Bitonic claimed it did “not receive a convincing answer to the fundamental questions we raised on this matter during the registration process,” and is still awaiting a reply to a letter 25 out of the 38 registered cryptoservice entities sent to the DNB last November.

“Meanwhile, we are for some time now, forced to work in a way that violates privacy rules. To avoid doing so, we asked DNB again, early this year, to revoke the requirement. This request was denied with a referral to the Sanctions Act. However, we do not agree with that explanation,” according to the platform.

“That is why we decided this week to urgently file a preliminary injunction at the court in Rotterdam in order to suspend the wallet-verification requirement of DNB,” the firm said.

Set up in 2012, Bitonic claims it is the first BTC-focused business to be established in the Netherlands.
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