Monday, March 8, 2021

Dutch crypto exchange Bitonic fights back central bank over wallet KYC rule.

The Takeaway:

A Dutch crypto exchange Bitonic is taking the central bank to court over the new wallet KYC rule as it reportedly violates existing customer privacy laws.

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Dutch Bitcoin exchange platform, Bitonic, has filed a preliminary injunction at a Rotterdam court seeking the suspension of a wallet verification rule enacted by the central bank. In November 2019, the Dutch central bank, De Nederlandsche Bank, or DNB, mandated crypto exchanges to ensure their users comply with stringent Know Your Customer protocols. These rules included verification steps for withdrawal wallets, which Bitonic called a nuisance. At the time, Bitonic was only one of three licenses granted by the DNB out of 38 applications to the central banks by crypto exchanges.


25 out of 38 applicants also sent a joint letter to the DNB over the KYC rule. 

25 out of 38 applicants also sent a joint letter to the DNB asking for greater clarity about the need for such stringent compliance protocols. According to Bitonic’s announcement, the DNB has reportedly failed to address concerns raised by Bitonic over the controversial KYC rule. The crypto exchange also revealed that an independent compliance firm recently provided expert advice on the matter, stating that the central bank’s actions lacked any legal merit.


Bitonic claims the new KYC protocol violates existing customer privacy laws. 

According to the Dutch crypto exchange, the introduction of sweeping wallet verification protocol violates existing customer privacy laws. “We believe it is of crucial importance that a judge considers DNB’s position so that it becomes clear whether the requirements are legitimate,” the company added in its announcement. Bitcoin announcement reads, “Our objective is to be able to quickly halt the comprehensive processing of personal data imposed on us. We want to return to the situation where we ourselves determine, on a risk-based basis, whether we ask the customer to prove his management of the wallet.” Several other countries are also tightening up crypto regulations. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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