Netherlands demands to justify buying bitcoins even on non-custodial exchanges

The non-custodial service for buying and selling bitcoin (BTC) in the Netherlands, Bitonic, is applying new regulatory measures for its users. The company announced that the operators must state the purpose of the purchase of the cryptocurrencies and demonstrate the ownership of the BTC addresses.

The new audit guidelines are executed at the request of the Central Bank of the Netherlands. The goal is to try minimize the risk of bitcoin trading being used in money laundering and terrorist financing (KYC / AML).

Bitonic applied the measures under protest since Monday, November 16, considering that the requirement is “ineffective and disproportionate.” A request from the company for the bank to reconsider the decision was dismissed by the financial institution.

“From now on we are obliged to ask for additional details such as the purpose for which you intend to buy bitcoins and what type of wallet you use. Furthermore, we are obliged to verify that you are the rightful owner of the given bitcoin address, by asking you to upload a screenshot of your wallet, or by signing a message, ”the platform reported through its website.

In its message to users and the bitcoiner community, Bitonic questioned that the Netherlands is currently the only state in the European Union where these types of requirements are required to operate. However, the application of this type of measures could be replicated in other exchanges and in other latitudes, which would compromise the privacy of users.

License to operate and Bitonic users

Cryptocurrency blockchain standards

Cryptocurrency blockchain standards

Bitonic applied the new regulatory measures mandated by the central bank to tighten the KYC / AML protocols. Source:

Bitonic’s decision would be related to another announcement released on Tuesday. The service received the approval of the central bank to be included in the registry of service providers with cryptocurrencies. In other words, the platform founded in 2012 weighed the application of the rules to have a full license.

On this point Bitonic said: “we have mixed feelings about the registration requirements because we did not agree with the supervisor on the legal basis of some of the requirements. Therefore, we ask our clients for their understanding when faced with the additional control measures and verifications that we need to apply.

On Twitter, Bitonic’s decision generated different opinions among traders. One of them was @Crypto_Guppy who supported the application of the new regulatory measures by replying to another user, who questioned him for congratulating the company: «Yes, all that license / registration is a law that cannot be believed, but would you prefer that Will Bitonic close its doors after all these years? ».

The response was directed to @abcdehoop who had previously written: «How is that? Have you already reviewed the additional verification process? Congratulations are totally out of place here! ‘

Regulations on bitcoin and cryptocurrencies on a global scale are more common, especially between exchanges and services for its commercialization. Banks, regulators, and anti-money laundering and terrorist financing organizations are demanding new levels of verification to prevent potential crime.

The guidelines are applied by companies that, in many cases, decide to freeze the accounts of those who do not end up complying with the new regulations. CriptoNoticias reported in October that the LocalBitcoins service had frozen user accounts in 12 countries until they met the new KYC requirements.