Netherlands and Cryptocurrency
Netherlands Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
January 2018 the De Nederlandsche Bank (DNB) posted a position paper stating that cryptocurrencies do not fulfill the role of money and do not have any implications on monetary policy.[1] The Dutch Minister of Finance stated in a letter to the Dutch parliament that a ban on cryptocurrencies is not desirable, but regulating cryptocurrency trade on a European or international level would be beneficial. [2] This regulation was implemented by the May 21, 2020 Dutch Implementation Act, subjecting only wallet providers and crypto exchanges to the fifth European Directive on Anti-money laundering and counter-terrorist financing (AMLD V).[3] Pursuant to AMLD V, crypto service providers must register with the DNB, comply with integrity rules for business conduct, request declarations of no-objection for anticipated qualifying holdings in the crypto service provider, implement AML polices consisting of KYC procedures, monitoring transactions, and filing Suspicious Activity Reports to local law enforcement.[4] Providers operating or based in the Netherlands must register, and unregistered operations face imprisonment and fines.[5] Registration is extensive and requires: a business plan which includes a description of activities, targeted market share, SWOT analysis, description of companies growth plans and expected revenue and partnerships; assessment forms which each policymaker will be subject to a fit and proper screening by DNB; organizational charts; policies for ethical conduct, including outsourcing, training, reporting, conflicts of interest, and compliance obligations; integrity risk analysis; relevant outsourcing agreements allowing DNB to supervise the crypto service provider.[6]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. Â The globe below provides links to country-by-country summaries:
- Blockchain Technology Explained: What is Blockchain and How Does It Work?
- Legal Issues Surrounding Cryptocurrency
- Cryptocurrency and Bankruptcy
- Cryptocurrency Transactions: Multi-Signature Arrangements Explained
- Cryptographic Hash Functions
- Distributed Ledgers The technology behind Blockchain brings business opportunities and legal complexities
- Hard and Soft Forks: A Detailed and Simplified Explanation of How Blockchains Evolve
- Hash Collisions Explained
- IRS Cryptocurrency Taxation: What you Need to Know in 2020
- Merkle Trees
- Mining Explained: A Detailed Guide on How Cryptocurrency Mining Works
- Preimage Resistance, Second Preimage Resistance, and Collision Resistance
- Quantum Supremacy’s Potential Impact on Cryptocurrencies
- SHA-256
- Smart Contracts
- The History of the Blockchain and Bitcoin
- Blockchain Attacks: Is No One Safe in the World of Cryptocurrencies?
- Cryptographic Hash Algorithms: An Introduction
- Overview of the Most Common Cryptocurrencies
- Double-Spending Problem and Byzantine General’s Problem in Relation to Cryptocurrency
- IRS Cryptocurrency Taxation: What you Need to Know in 2020
- Permission and Permissionless Blockchains
- The Tor Network
- Turing Completeness and cryptocurrency
- Cryptography: Public Key Infrastructure (PKI)
- Blockchain Attacks: Is No One Safe in the World of Cryptocurrencies?
- Decentralized Governance Mechanisms
- The Dark Web and the Deep Web
- The Most Common Cryptocurrencies
- Anti-Collusion | What Is Obfuscation?
- What Is Post-Quantum Cryptography?
Podcast:
Is cryptocurrency legal in the Netherlands?
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Cryptocurrency World Survey, Netherlands, https://www.loc.gov/law/help/cryptocurrency/world-survey.php#_ftn450
[2] Id.
[3]Hopman et.al., Attention Crypto Service Providers: You are now Regulated!, DLA Piper (May 29, 2020), https://www.dlapiper.com/en/netherlands/insights/publications/2020/05/attention-crypto-service-providers-you-are-now-regulated/.
[4] Id.
[5] Id.
[6] Id.