The Netherlands took the lead among European Union member states by mandating that crypto companies adhere to the 5th Anti-Money Laundering Directive (5AMLD).
Leading cryptocurrency exchange Gemini has decided to halt its operations in the Netherlands, citing mounting regulatory hurdles imposed by the Dutch central bank De Nederlandsche Bank (DNB). The move follows the footsteps of Binance, another digital asset trading platform that withdrew from the market earlier this year due to similar regulatory constraints.
In an emailed statement addressed to its Dutch users on September 26, Gemini conveyed its intention to suspend its services in the Netherlands, effective November 17, 2023.
Gemini to Exit Netherlands Due to Regulatory Pressure
Gemini explained in the email that the decision was influenced by stringent requirements imposed by the country’s central bank, DNB, on crypto exchanges.
However, the company plans to return to the Dutch market once it achieves full regulatory approval from the appropriate authorities in compliance with the new European law on cryptocurrencies, the Markets in Crypto-Assets Regulation (MiCA).
“Gemini continues to be committed to working collaboratively with regulators around the world and is focused on getting our business ready to be fully compliant with the new EU rules on crypto-assets, as set out under the Markets for Crypto-Assets Regulation (MiCA), whereby we hope to be able to offer crypto-asset services to customers based in the Netherlands in the future.”
Gemini Users Have until November 17 to Exit the Platform
The New York-based exchange has requested users to start withdrawing their assets on the platform as the exchange will completely shut down operations on November 17.
“We kindly ask you to proceed in emptying your Gemini account and ensuring that you no longer have a balance on your account as of November 17, 2023. We thank you for your support over the years and hope you understand our direction,” wrote the company.
To enable the safe transfer of funds, the company suggested that users move their assets to the local exchange Bitvavo, which is duly registered under the DNB jurisdictions as a crypto exchange.
However, users are not limited to Bitvavo as the exchange has encouraged its Netherlands customers to choose any preferred platform or wallet for the transfer.
Crypto Regulatory Landscape in the Netherlands
The Netherlands took the lead among European Union member states by mandating that crypto companies adhere to the 5th Anti-Money Laundering Directive (5AMLD). Under these regulations, Virtual Asset Service Providers (VASPs) had to furnish identifying information about themselves and their customers.
In November 2020, the country required VASPs to gather additional information before finalizing any transactions. This included verifying beneficial ownership and providing proof of ownership of a Bitcoin wallet.
However, in May 2021, the requirement was rescinded. DNB reportedly recognized the necessity of adopting a more risk-based approach to Anti-Money Laundering (AML) compliance.
The Dutch regulatory landscape for cryptocurrencies became notably rigorous when Binance withdrew its services from the country in July. Binance’s exit was driven by its inability to obtain a VASP license from the DNB, which serves as proof of compliance with the established AML protocols in the country.
Earlier this year, in January, the DNB fined Coinbase for operating in the country without proper authorization from the authorities. The company later obtained approval and became licensed to service its customers in the region legally.
So far, other crypto exchanges such as Crypto.com, BitPay, and eToro are licensed to operate in the country.
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.