Bitonic Sues the Dutch Central Bank

The Netherlands-based bitcoin exchange Bitonic filed a suit in Rotterdam court against the local central bank. It seeks to suspend the requirement for KYC verification on withdrawals.

The authorities have required cryptocurrency service providers monitor incoming and outgoing transactions in accordance with the Sanctions Act. In November 2019, the Dutch Central Bank ordered crypto exchanges to ensure compliance with strict KYC procedures. Failure to comply could jeopardise registration.

Bitonic users must confirm each withdrawal address by sending a wallet screenshot or a signed message.

At the end of last year Bitonic was one of three companies to receive the regulator’s licences. Twenty-five of 38 applicants sent a joint letter to the regulator asking for greater clarity regarding the necessity of complying with the measures proposed to them.

Bitonic believes the Dutch Central Bank has not solved the problem associated with tightening KYC checks. The compliance consultancy hired by the bitcoin exchange, after reviewing the situation, concluded that the Bank’s actions have no basis.

Bitonic stressed that implementing an expanded wallet-verification protocol breaches existing customer privacy laws.

“We believe it is crucial that the judge review the Dutch Central Bank’s position and provide clarity on the legality of these requirements. We want to halt the comprehensive processing of personal data and independently determine the necessity of wallet ownership verification by the client,” according to the company’s statement.

Similar identification requirements for withdrawals to a personal wallet may become mandatory for US bitcoin exchanges.

Recently, FinCEN within the US Treasury extended the comment period for these rules by 60 days.

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