Netherlands-Based Coinbase Customers Required to Submit KYC Data When Transferring Crypto off the Platform – Regulation Bitcoin News

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Netherlands-Based Coinbase Customers Required to Submit KYC Data When Transferring Crypto off the Platform – Regulation Bitcoin News
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Coinbase has announced that it plans to make some changes for customers in the Netherlands to comply with the 1977 Sanctions Act, which recently applied know-your-customer (KYC) guidelines to non-custodial wallets. If someone living in the Netherlands wants to send cryptocurrency 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 address.

On June 27, Coinbase said the Netherlands will require KYC information for outgoing cryptocurrency transfers

If Dutch Coinbase customers do not provide KYC information, it may be more difficult for them to send money to someone with a third-party or non-custodial wallet. Starting June 27, 2022, Coinbase will require Dutch users to provide KYC data if they plan to send cryptocurrencies to wallets outside of the Coinbase platform.

Coinbase said it is applying the new rules because the company must comply with local regulations. The Sanctions Act of 1977 and the Anti-Money Laundering and Terrorist Financing Prevention Act (Wwft) require Virtual Asset Service Providers (VASPs) to provide KYC data on outgoing transactions involving non-custodial and third-party wallets.

The Sanctions Act 1977 was codified by the Netherlands Authority for the Financial Markets (AFM) and the Netherlands Central Bank (DNB). This means that Coinbase or any Dutch VASP must determine who the crypto transfers are and the purpose of the transaction.

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When Coinbase applies the new rules to Dutch customers, they can check a box that the transfer is being sent to themselves. However, if a Coinbase customer from the Netherlands wants to send funds outside of Coinbase to another person, they must provide identification details.

Jeff Garzik expects KYC rules to expand beyond the Netherlands

Coinbase’s blog post to Dutch customers said they had to provide “full name,” “purpose of transfer,” and “recipient’s full residential address.” If the person doesn’t know the address, they need to stop and get information before continuing.

“We need to collect additional information for all transactions by Dutch customers sending cryptocurrencies from their Coinbase exchange accounts to addresses not controlled by Coinbase,” explained the cryptocurrency exchange’s blog post.

While the new rules only apply to customers in the Netherlands, there are concerns that the regulatory approach could happen in other countries.

“Only the Netherlands at the moment, but expect to expand,” former Bitcoin Core developer Jeff Garzik said on Twitter. “Don’t blame Coinbase – they know it’s antithetical to most crypto users and won’t do it voluntarily. Enforcement of the travel rule will be an ugly battleground. The LEA wants to monitor all parties in all transactions.”

Garzik added:

Current crowd advice: Always deposit and withdraw from your own wallet. This is a good idea for security, privacy and accounting reasons as well as legal reasons.

tags in this story

Sanctions Act 1977, AFM, Bitcoin, BTC, Coinbase, Coinbase Platform, Compliance, Crypto Exchange, Crypto Transfer, DNB, Jeff Garzik, Know Your Customer Policy, KYC, Netherlands, Dutch Crypto, Dutch Clients, Non-custodial Exchange , non-custodial wallets, outgoing transfers, regulations, regulations, rules and regulations, third-party wallets, travel rules, VASP

What do you think of the new Coinbase rules for Dutch residents? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is Head of News for Bitcoin.com News and a fintech reporter based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 5,000 articles for Bitcoin.com News on the disruptive protocols emerging today.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or an invitation to buy or sell, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned herein.

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