Dutch regulators propose a license regime for crypto exchanges

The Dutch central bank – the De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) have jointly proposed licensing requirements for all crypto exchanges operating on Dutch soil.

The regulations will require all crypto exchanges and e-wallet providers to monitor, collect, and store customers’ transactions data on their platform and to report any suspicious activity to the authorities.
In order a crypto exchange to receive an operating license, it will first have to pass a testing period with the Central Bank, which will monitor the exchange to check if it is capable of collecting and storing the required data.

According to the report, published by the Central Bank and AFM last week, all crypto exchanges and custody solution providers must be licensed, because crypto currencies come with “high financial crime risks.”

This news is not surprise for me at all. Netherland has whole bunch of regulations for financial markets participants, so why would crypto exchanges be out of the system if they want to operate on local market?

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True. In my opinion, regulating the sector is not necessarily a bad thing, more regulation may make exchanges more reliable.

but it involves bigger commissions instead

If you get scammed or a hacked because of lack of oversight you lose everything anyway. It’s difficult to find the balance, that’s true. But mainstream financial institutions will never exist entirely without oversight. If cryptocurrency exchanges want to be part of the mainstream compromises will have to be made.