Coinbase said users of the Netherlands would have to follow KYC rules when making transfers from Coinbase. It stated that the rule would bring its operations in compliance with local regulations.
The 1977 Sanctions Act requires financial service providers to verify the identities of transacting parties on its platform. AML CFT is required in financial transactions, and is required by the mandatory requirement.
Users making transfers to wallets off Coinbase will have to provide information about the transaction. This includes the recipient's full name, the purpose of transfer, and the recipient's residential address.
It stated that the latest introduction would not affect the usual transactional experience on the platform.
Coinbase has made similar announcements to abide by local regulations in other countries. In March, the company announced that it would start tracking off-platform transactions executed by users in Canada, Singapore, and Japan.
Regulators in the Netherlands have recently called for increased regulation of the space, with some asking for a total ban.
Pieter Hasekamp, the director of the Dutch Bureau for Economic Analysis, called for a total ban on the country stating that the country must curb the hype. He claimed that the use of cryptocurrencies is associated with security concerns, fraud risks, and scams.
Paul-Willem van Gerwen, head of Capital Markets and Transparency Supervision at the Dutch Authority for Financial Markets AFM ruled digital assets unsuitable for payments or investments.
He expressed concerns about the transparency of the markets and susceptibility to manipulation and other criminal activity.
The AFM doesn't have powers over the markets due to the implementation of the EU law, Markets in Crypto Assets Regulation MiCA.
The Markets in Crypto Assets Regulation MiCA proposed in 2020 is the EU s response to the need for an encompassing regulation for digital assets. The increased market volatility has heightened calls for a regulatory framework for digital assets. The bodies negotiating the MiCA are the 27 member states, the European Commission, and the 27 member states. According to Bloomberg, the negotiators recently met in June and are expected to meet again by June 30 to get the rule ready for France's six month rotation in the presidency. The European Commissioner Mairead McGuiness has called for compromise on the rules and hastened negotiations. She stated that the rules have become more urgent because of the TerraUST crash and Russia's use of cryptocurrencies to evade sanctions. Verena Ross, head of the European Securities and Markets Authority, made a similar call in May. She appealed for the quick completion of the rules, which she said she was waiting for with great impatience.