Coinbase announces that it will make some changes in compliance with the 1977 Sanctions Act. The law, which recently used know-your-customer guidelines (KYC), to non-custodial accounts, has been applied to Coinbase customers. If the person living in the Netherlands wants to send crypto to a third-party wallet via Coinbase, they must identify the wallet owner’s name, the purpose of transfer, and the full residential address of the recipient.
Coinbase Announces that KYC Information Will be Required in The Netherlands on June 27th for Crypto Transfers Outgoing
Dutch Coinbase customers may have a harder time sending funds to people with a third-party or non-custodial wallet if they don’t provide KYC information. Coinbase will begin requiring that users from the Netherlands provide KYC data starting June 27th, 2022, if they intend to send crypto to wallets via the Coinbase platform.
Coinbase claims that the new rules will be applied to the company because it must adhere to local regulations. With the Money Laundering and Terrorist Financing Prevention Act, 1977 Sanctions Act and Coinbase’s new rules are required for virtual asset service provider (VASPs), to submit KYC data regarding outgoing transactions involving third-party and non-custodial wallets.
The Dutch Authority for Financial Markets and the Netherlands Central Bank have codified the 1977 Sanctions Act. The Dutch Authority for Financial Markets (AFM) and Dutch Central Bank (DNB) have codified the 1977 Sanctions Act. This requires that Coinbase or any Dutch VASP must clearly identify the recipient of crypto transfers as well as the intended purpose.
The new rules apply to Dutch customers. Customers can tick a box to note that the transfer has been sent to them. If a Coinbase customer in the Netherlands wishes to transfer funds to someone else, they will need to provide identification details.
Jeff Garzik expects that the KYC Rule will expand beyond the Netherlands
Coinbase’s blog post to Netherlands customers says they must provide a “full name,” the “purpose of transfer,” and the “full residential address of the recipient.” If the person does not know the address, they need to stop and get the information before proceeding.
“We are required to collect additional information for all transactions where a customer in the Netherlands sends crypto from their Coinbase exchange account to an address that is not controlled by Coinbase,” the crypto trading platform’s blog post explains.
While the new rule is only for customers in the Netherlands, there’s concern the regulatory approach could happen in other countries.
“Only the Netherlands for now, but expect this to expand,” former Bitcoin Core developer Jeff Garzik saidFollow us on Twitter. “Don’t blame Coinbase – they know its antithetical to most crypto users, and would not do this voluntarily. Enforcement of the Travel Rule will prove to be a difficult battleground. LEA wants to surveil all parties in all transactions.”
Garzik added:
Current advice from the crowd: Don’t deposit or withdraw money to anyone else. It’s a good idea for security, privacy and accounting reasons, as well as legal.
Let us know your thoughts about Coinbase’s rules for Dutch residents. Comment below and let us know how you feel about the subject.
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