Coinbase recently announced that the company plans to make a series of changes for customers in the Netherlands to comply with the 1977 Sanctions Act, a law that applies know-your-customer (KYC) guidelines to unattended wallets. If a Dutch resident wishes to send crypto to a third-party wallet via Coinbase, they must identify the wallet owner’s name, the purpose of the transfer, and the recipient’s full residential address.
On June 27, Coinbase Says Dutch KYC Knowledge Will Be Required for Outbound Crypto Transfers
Dutch Coinbase customers may have a hard time sending funds to people with third-party or unattended wallets if they don’t provide KYC information. Starting June 27, 2022, Coinbase will require users in the Netherlands to provide their KYC data if they plan to send crypto to a wallet outside of the Coinbase platform.
Coinbase says the new rules are in place because the company must comply with local regulations. The Sanctions Act of 1977, along with the Anti-Money Laundering and Terrorist Financing Act (Wwft), requires virtual asset service providers (VASPs) to provide KYC data on outbound transactions involving non-custodial and third-party wallets.
The Sanctions Act 1977 was codified by the Dutch Financial Markets Authority (AFM) and the Dutch Central Bank (DNB). This means that Coinbase, or any Dutch VASP for that matter, must define 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 a Dutch Coinbase customer wishes to send funds to someone other than Coinbase, they must provide their credentials.
Jeff Garzik Expects KYC Rule to Expand Beyond The Netherlands
Coinbase’s blog post for Dutch customers says they must provide “full name”, “transfer purpose” and “recipient’s full residential address”. If the person does not know the address, they should stop and get information before continuing.
“We need 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,” the crypto trading platform’s blog post explains.
While the new rule only applies to customers in the Netherlands, there are concerns that the regulatory approach could be in other countries as well.
Former Bitcoin Core developer Jeff Garzik said, “Just the Netherlands for now, but we expect this to expand” aforementioned from Twitter. “Don’t blame Coinbase – they know it’s antithetical to most crypto users and they don’t do it voluntarily. The Travel Rule app will be an ugly battleground. The LEA wants to spy on all parties in all transactions.”
Current crowd advice: Always deposit and withdraw funds from your own wallet. It’s a good idea for security, privacy, and accounting reasons, as well as for legal reasons.
What do you think of the new Coinbase rules applied to Dutch residents? Let us know what you think about it in the comments section below.
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