Cryptocurrency exchanges in the Netherlands will soon need a license to continue their operations. The Dutch central bank wants to regulate the market to fight money laundering and terrorist financing.
As reported by Dutch Newspaper De Telegraaf on December 11th, the goal is to deter criminals to money laundering or financing terrorist acts. Crypto exchanges must report “unusual transactions” to obtain the license. In addition, they also have to integrate the “know-your-customer” policy into their security operations.
Cryptocurrencies & criminal activities
The use of cryptocurrency for money laundering activities is actually a real problem. According to a new report, during the last two years more than $ 88 million was laundered on 46 crypto exchanges
One example is sex advertising site backpage.com. The website did launder millions of dollars in Bitcoin during the last years. In a 61-page federal petition, the US Department of Justice officially accused the online sex market of money laundering. Other charges included conspiracy and the facilitation of prostitution.
In April 2018, the Justice Department closed backpage.com down. It became apparent that the company had been promoting underage prostitution and sex trafficking since its launch in 2004. Cases like these confirm regulators that are already suspicious of cryptocurrencies.
Cryptocurrency: Allegations & Facts
However, according to Québec’s scientific director Rémi Quirion, crimes involving cryptocurrencies are still on the low end. Quirion published a report in April of this year. He concluded that Bitcoin is mistakenly seen as the number 1 source of money laundering and criminal activities. The facts do not support these allegations:
“Bitcoin is not above the law, nor is it a magnet for illicit transactions: it forms only a tiny part of the criminal money circulating around the planet. The reason: it is less attractive for anyone who wants to make transactions without leaving a trace.”
Numerous studies have come to the same conclusion. Bitcoin and other cryptocurrencies are virtually no alternative for criminals.