Netherlands Coinbase Customers Required to Submit KYC Data When Transferring Crypto off the Platform


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