The central bank of the Netherlands, DNB, has reversed its recent decision to tighten up the rules around withdrawals from cryptocurrency exchanges over concerns the measures would have amounted to an unnecessary invasion of customer privacy. Earlier this year, the central bank published new rules for crypto exchanges, requiring them to collect more personal details about users at the point of withdrawal.
Netherlands had asked crypto exchanges to tighten up KYC rules.
According to the earlier announcement, crypto exchanges were asked to seek more personal details about users at the point of withdrawal. As well as supplying a recipient address for the funds, users would also be required to provide a photo for verification, proving that they owned the address. However, the proposals were met with dismay from the crypto community in the Netherlands, with objections filed with the bank, including from local exchange Bitonic. Nevertheless, both Bitonic and Bitstamp began enforcing the new rules on customer withdrawals.
“A serious violation of our customers’ right to privacy.”
In a statement of objection filed, crypto exchange Bitonic said the requirements were unnecessary and went far beyond what was required to achieve the central bank’s aims. “Aside from the fact that verifying every address for every transaction has no technical merit, it is also a serious violation of our customers’ right to privacy.” Consequently, a judge in Rotterdam ruled the objection had merit and that the central bank should consider the objection and respond accordingly within a six-week timeframe. Reversing its earlier position, DNB said the measures do “not do enough justice to the discretion that an institution has to implement this standard in a risk-oriented manner.”