Mandatory identity checks starting in 2020

As a result of the new European anti-money laundering guideline AMLD5 we are obligated to abide to stricter regulation for the buying and selling of bitcoins before the summer of 2020 (exact date not yet known) at Bitonic and BL3P. Part of the new regulations is a tightened identity check of all customers.

On the 3rd of December 2019 the House of Representatives of the Netherlands voted in favor of implementing the new European anti-money laundering guideline AMLD5 into Dutch Law via the prevention of money laundering and financing of terrorism (Wwft).

That means that customers that buy or sell bitcoins after the starting date in 2020 have to identify themselves based on identification documents. Moreover, additional questions regarding source of income, origin of money and bitcoins and the destination can be asked. Bitonic is also obligated to monitor and check the transactions of customers if they match the riskprofile during the relation.

In some other sectors the Wwft regulation only applies when it involves large amounts. For example, in the case of jewelry- or real estate trading it only applies when the values are higher than €10.000. For the trading of virtual currencies such as bitcoin the rules will also apply to smaller amounts.

At this moment the Dutch Senate is discussing the precise implementation of the Wwft, so not all the details are known yet, but we can be sure that identity verification is included. According to the current planning the new rules will be implemented before the summer of 2020, maybe already in April.

Far-reaching consequences on privacy

As Bitonic we have mixed feelings about the bill. We are happy that there is finally some clarity. But we also believe that the intended law is disproportional and we are very worried about the privacy of citizens. The right for privacy is always placed second by regulation due to anti-money laundering and terrorism financing and this leads to a police state. We are of course bound to the Dutch regulation and we will abide, but we are worried about the far-reaching effects on the short and long term. The new regulation and mandatory transaction monitoring applies to all customers and amounts and this will limit the financial freedom of citizens.

Privacy and Bitonic

Since the start of Bitonic in 2012 privacy has been of the highest priority. Privacy is namely synonym with safety. Due to all new KYC/AML regulations it is mandatory to ask customer information and store it. Many organizations choose to outsource the KYC/AML checks to third parties. This leads to organizations sharing all customer information, such as personal and identify documents. For this reason Bitonic has decided to develop and maintain the whole identification process internally. This way we can ensure that information of customers is not stored at third parties, but at our own systems.

A few weeks before the introduction of the new regulations we will give customers the possibility to meet the stricter identity verification to make the transition to the new situation as smooth as possible.

Read more about the coming AMLD5 regulation and consequences (Dutch).