Cryptocurrency Is Not Good Enough as a Means of Payment or Investment According to Dutch Financial Specialist 


While there has been widespread cryptocurrency adoption in many industrial sectors worldwide, a Dutch regulator believes that the crypto derivatives market should be restricted to wholesale trade due to familiar reasons, including lack of transparency, market manipulation, and other criminal activities. 

On 12 May, during the Amsterdam Propriety Traders Managers Meeting, the head of Capital Markets and Transparency Supervision at the Dutch Authority for Financial Markets (AFM), Paul-Willem van Gerwen opened up on his views cryptocurrency.

Van Gerwen noted that despite (or perhaps because of) the market’s rising interest in crypto derivatives trading, the AFM “do regard such trade as entailing risks” and consider this market to be not as mature as the other derivatives markets. Moreover, a specific problem arising from the volatility of the crypto products, according to van Gerwen, leads to whether “the parties to the derivative transaction will be in a position to fulfil their promises.”

Therefore, the AFM believes that crypto derivative operations should be restricted to the wholesale trade. However, the official also added that, unlike its British peers from the Financial Conduct Authority (FCA), the AFM is yet to ban such transactions but alluded that it surely might do so:

“Don’t get caught up in the excitement of this trading, don’t let yourself be tempted into retail trading.” He said.  “Cryptos and derived tools aren’t yet suitable as a means of payment and/or investment.”

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Dutch Central Bank Believes Cryptocurrency and Binance Needs to Be Regulated 

De Nederlandsche Bank, the central bank of the Netherlands, issued a warning to Binance Holdings Limited and other networks offering crypto services to residents last year.

De Nederlandsche Bank said the major crypto exchange was not operating in compliance with the country’s Anti-Money Laundering and Anti-Terrorist Financing Act, alleging that Binance customers were at risk of “becoming involved in money laundering or terrorist financing.” According to the central bank, Binance illegally offers crypto services and custodian wallets without the required legal registration.

The Dutch central bank specified that its notice was to the cryptocurrency exchange’s parent company, Binance Holdings Limited, and entities “under which Binance provides crypto services in the Netherlands.” This would seemingly apply to the global crypto exchange as well.

A Binance spokesperson said the crypto exchange “is submitting an application for the required registration” and “will be working constructively” with the central bank to meet its requirements. 

“It is key to Binance that our users’ interests continue to be protected,” said the spokesperson. 

“Although we are not formally registered with [De Nederlandsche Bank] yet, we have a robust compliance program that incorporates tools and procedures to combat money laundering and terrorist financing.”

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