Out-Law News 1 min. read
25 Oct 2023, 12:47 pm
The District Court of Rotterdam has ruled that levies imposed by the Dutch National Bank (DNB) on crypto service providers were unlawful, in a highly-anticipated decision.
Wouter Seinen, technology regulation expert at Pinsent Masons, said the ruling offered a crucial insight into the registration obligations and cost burdens placed on crypto service providers, and underscored the importance of adherence to EU legislation.
The case centred on levies raised in 2021, and on the way DNB evaluates registration requests under the Dutch Anti Money Laundering and Anti-Terrorist Financing Act (Wwft).
The court ruled that DNB’s assessment of registration requests does not align with the registration requirements set out for crypto service providers in the latest Anti-Money Laundering Directive (AMLD), as amended by the EU. As a result, the court held that the DNB is not authorised to pass on the associated costs to these providers.
“Now, serious parties in the cryptocurrency ecosystem will no longer struggle with a lack of legal certainty and an increasing cost of compliance. This judgment will be deeply encouraging for those operators who are working towards a properly regulated NFT and crypto market,” Seinen said.
He added: “With the Market in Crypto-Assets Regulation (MICAR) on the horizon, which aims to address the fragmentation of the legal framework applicable to cryptoassets, it was remarkable that regulators expected the emerging market to pick up the bill of developing the required supervision best practices for crypto.”
Luke Scanlon, fintech expert at Pinsent Masons, said it was likely the judgment will be given close consideration in the UK as the regulation of cryptoassets and economic crime levying activities continues to evolve.
He added: “Over a number of years now there has been convergence in the approach taken towards financial crime levying arrangements. This issue of levies was a sticking point, however, with questions raised over how to promote innovation and fairness across financial and crypto markets.”