Holland will be introducing a new anti-money laundering (AML) law, which has been drafted under the provisions of the European Union’s fifth anti-money laundering directive (AMLD5). Under the new law, Dutch financial authorities are intending to implement the most stringent and expensive crypto regulations Europe has seen so far. If successfully implemented, the Dutch crypto industry is expected to take a big hit, where small crypto firms may be forced to exit the market.
Firstly, the Holland’s Ministry of Finance has tasked the central bank with overseeing the industry, and the additional administrative costs of this task amounting to €1.7 million (~$1.8 million) will fall on Dutch crypto companies. While exact details have not been confirmed, 50 crypto firms are expected to pay for the extra costs, with some larger companies paying a larger proportion of the additional fees.
“The AMLD5 will aim to reduce the capabilities to exploit identified loopholes by criminals and better counter-terrorism financing. This happens notably by increasing transparency about who really owns legal entities and trusts, broadening the criteria for assessing high-risk third countries and ensuring a common high level of safeguards for financial transactions from such countries,” reported Deloitte.
Small crypto firms and industry advocates are understandably dissatisfied with the proposed law. Compliance fees are unjustifiably more expensive for crypto companies than the fees traditional trust and credit companies have to pay. For example, a small Dutch crypto brokerage with only three employees, Bitkassa, may have to pay €34,000 annually and this will prove to be more costly than the firm can afford. In all likelihood, small crypto businesses will end up relocating out of Holland or closing down permanently, effectively snuffing out innovation in the Dutch crypto and blockchain sector.
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