Amendment in law requires cryptocurrency providers to verify

15 april 2020

The savings interest rates in Europe are moving towards 0% and this affects the financial wealth of people. In addition, the prices of the stock market have dropped sharply. Investors will look for other profitable ways to spend their savings, and cryptocurrency seems to be an attractive market.

Interest in cryptocurrency branch is rising sharply

Search engines Google and Baidu (most popular search engine in China) show that there is a significant increase in the searches around cryptocurrencies. This increase has started since people are working from home. According to a report by cointelegraph, Baidu has noted a massive growth of 183% in searches for “Bitcoin”.

 

AML and CFT (Anti-Money laundering and Combatting the financing of terrorism)

The anonymous character of cryptocurrency makes it attractive for criminals to invest in this virtual currency. This was exactly the reason for the Dutch parliament to adopt a new law concerning the Fifth Anti-Money Laundering Directive (AMLD 5) and to change the AML-and CFT legislation. Cryptocurrency providers need to comply with the AML- and CFT legislation since the beginning of 2020.

This legislation requires cryptocurrency providers, among other things, to identify and verify customers. De Nederlandsche Bank (DNB) is going to monitor if the providers can comply with the requirements which are determined in the new law.

 

Remote identification and verification according to laws- and regulations

The crypto currency market seems to be an attractive market alternative as due to the low saving interest rates and the drop of the stock market. New traders will enter the market in the coming period.  
 
Cryptocurrency providers generally don’t have locations with personnel to identify and verify new traders. Besides that, the coronavirus obliges everyone to avoid physical contact as much as possible. For these reasons, cryptocurrency providers need to find an alternative for the identification- and verification process. 
 
DataChecker takes care of the identification- and verification process. It is possible to identify and verify remotely, which is essential for crypto providers, especially in times of corona. The processes are set up safely in accordance to the GDPR legislation. In this way, complies your organisation demonstratable with the AML- and CFT legislation.  

 

*AML = Anti-Money laundering

*CFT = Combatting and the financing of terrorism

*GDPR = General Data Protection Regulation