Dutch cryptocurrency firms, including Bitvavo and Binance’s successor Coinmerce, have won a portion of their court battle against the $2.3 million in fines that Dutch regulators had levied.
In two recent judgements, a Rotterdam court ruled that the Dutch central bank (DNB) exceeded its legal authority when it required businesses to register for anti-money laundering purposes.
The court stated that “it is not possible under current crypto regulations to lawfully charge supervisory costs to crypto service providers for the year 2021” and that “the way in which DNB assesses registration requests is contrary to the scope of the registration obligation for crypto service providers” set out in European Union anti-money laundering laws.
The judges concluded that the corporations should still be regarded as being under supervision because the legislation continues to be in accordance with general standards of good governance. According to the judges, the decision has no impact on fees for 2020, and a different legal dispute is still pending for 2022 rates.
The Netherlands has adopted a severe stance against cryptocurrency firms, fining Coinbase and Binance millions of euros for failing to register even though it will soon have to implement the strict Markets in Crypto Assets licencing regime mandated by the EU. Due to DNB regulations, cryptocurrency exchange Gemini recently announced it was leaving the nation. In a similar move, Binance shifted its Dutch customers to Coinmerce.
According to Patrick van der Meijde, president of the United Bitcoin Companies of the Netherlands (VBNL), the trade association that organised the complaint, their group was “pleased that the court has found that the registration obligation as resulting from [EU anti-money laundering legislation] has been violated in the Netherlands.”
Because they are beyond of DNB’s purview, van der Meijde continued, “The high costs of this shouldn’t have been passed on.”
In Europe, financial regulators are typically not supported by taxes; instead, they levied fees on the firms they oversaw based on their size to cover operating expenses. According to van der Meijde, the total amount paid in cryptocurrency supervision fees in 2022 was 2.2 million euros, or $2.3 million.