On June 23, Coinbase announced in a blog post that from June 27 onwards, its’ users from the Netherlands will need to provide KYC data if they want to transfer crypto to a wallet off the platform.

Dutch Coinbase customers must identify the wallet owner’s name, the purpose of transfer, and the full residential address of the recipient, to transfer crypto to a third-party wallet via Coinbase. Users living in the Netherlands may have a tough time sending funds to individuals with a third-party or non-custodial wallet if they don’t provide KYC information.

Coinbase has reported that the organization intends to present various changes for clients in the Netherlands to conform to the 1977 Sanctions Act, a regulation that as of late applied know-your-customer (KYC) rules to non-custodial wallets.

Coinbase says the new guidelines are being applied in light of the fact that the organization should agree with local guidelines. The 1977 Sanctions Act combined with the Money Laundering and Terrorist Financing Prevention Act (Wwft) requires virtual resource specialist organizations (VASPs) to give KYC information on active transactions including non-custodial and outsider wallets.

The 1977 Sanctions Act is systematized by the Dutch Authority for Financial Markets (AFM) and Netherlands Central Bank (DNB). This implies that Coinbase, or any Dutch VASP besides, should recognize who the crypto transfer is going to and the reason for the transaction.

At the point when Coinbase applies the new rule to Coinbase customers from the Netherlands, they can check a box that noticed the transfer is being sent to themselves. In any case, for Dutch customers to send assets beyond Coinbase to another individual, they should give identity details.

Thursday’s blog post to Netherlands clients says they should give a "full name," the "purpose of transfer," and the "full residential address of the recipient." If the individual doesn't have a clue about the address, they need to pause and get the data 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 that is not controlled by Coinbase,” the crypto trading platform’s blog post explains.

While the new rule is just for users in the Netherlands, there’s a chance that the regulatory step could be applied in other countries as well.

“Only the Netherlands for now, but expect this to expand,” former Bitcoin Core developer Jeff Garzik said on Twitter. “Don’t blame Coinbase – they know its antithetical to most crypto users, and would not do this voluntarily. Travel Rule enforcement will be an ugly battleground. LEA wants to surveil all parties in all transactions.”

Garzik added, "Current crowd advice: Always deposit from, and withdraw to, your own wallet. It’s a good idea for security, privacy, and accounting reasons, as well as legal."

Joyashree Dey

CBW - External Analyst

INDIA