Coinbase has announced that the company plans to make a number of changes for customers in the Netherlands to comply with the 1977 Sanctions Act, a law that recently enforced the Know Your Customer (KYC) guidelines. If the person residing in the Netherlands wants to send crypto to a third-party wallet via Coinbase, they must identify the name of the wallet owner, the purpose of the transfer and the full residential address of the recipient.
June 27, Coinbase Says KYC Information Will Be Required In The Netherlands For Outgoing Crypto Transfers
Dutch Coinbase customers may have a harder time transferring money to those with an external or non-custodial wallet if they don’t provide KYC information. As of June 27, 2022, Coinbase will require users in the Netherlands to provide KYC credentials if they intend to send crypto to a wallet outside the Coinbase platform.
Coinbase says the new rules will be enforced as the company must comply with local regulations. The Sanctions Act 1977, combined with the Prevention of Money Laundering and Terrorist Financing Act (Wwft), requires Virtual Asset Service Providers (VASPs) to provide KYC data on outbound transactions with non-custodial and third-party wallets.
The 1977 Sanctions Act has been codified by the Netherlands Authority for the Financial Markets (AFM) and the Central Bank of the Netherlands (DNB). This means that Coinbase, or any Dutch VASP for that matter, needs to identify who the crypto transfer is going to and the purpose of the transaction.
When Coinbase applies the new rule to Dutch customers, they can check a box indicating that the transfer has been sent to them. However, if the Coinbase customer from the Netherlands wants to send money outside of Coinbase to another person, he must provide identification information.
Jeff Garzik Expects KYC Rule To Extend Outside The Netherlands
Coinbase’s blog post to Dutch customers states that they must provide a “full name”, “purpose of transfer” and “full residential address of the recipient”. If the person doesn’t know the address, they should stop and ask for the information before continuing.
“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 not controlled by Coinbase,” explains the platform’s blog post on crypto trading.
Although the new rule only affects customers in the Netherlands, there are fears that the regulatory approach could pan out in other countries.
“Only the Netherlands for now, but expect that to grow”, Jeff Garzik, former Bitcoin Core developer said on Twitter. “Don’t blame Coinbase – they know it’s the antithesis of most crypto users and wouldn’t do it on purpose. Travel enforcement will be a tedious battleground. LEA wants to monitor all parties in all transactions.
Current advice from the crowd: always deposit and withdraw from your own wallet. This is a good idea for security, privacy, and accounting reasons, as well as legal reasons.
What do you think of the new Coinbase rules that apply to residents of the Netherlands? Let us know what you think about this topic in the comments section below.
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