Crypto-undertakings under supervision as of 2020

Is your firm currently engaged in crypto currencies, or are you planning to be so?

In the near future, you might need a license for that. January 2020, the fifth Anti Money Laundering Directive (5AMLD) will be implemented in the Netherlands, in the Act for the prevention of Money Laundering and Terrorism Financing (Wwft). Several crypto parties will then become subject to anti-money laundering supervision. This means that they will carry a legal responsibility to counteract money laundering and terrorist financing.

If you have a crypto firm (or intend to establish one), you will have to act timely. In order to help you, Charco & Dique hereby lists the requirements for acquiring and retaining a license. If you have any questions or want to know more about crypto activities and services, please contact us.


The license obligation: who will be affected?

The license obligation will apply to:

  1. parties who offer exchange services between crypto currencies and fiat (regular) currencies in or from the Netherlands; and
  2. custodian wallet providers who operate in or from the Netherlands.

Because of the ‘in or from’-criterium, the license obligation has a wide scope. Firstly, all parties that are located in the Netherlands are subject to the obligation, even if they only provide services to clients outside of the Netherlands. Secondly, firms that are located outside of the Netherlands but target the Dutch market are subject to the obligation as well. That means that even if your firm has no establishment in the Netherlands, you may need a Dutch license to operate. However, the (draft) Dutch implementation act does make an exception for non-Dutch parties who have already obtained an equivalent license in another EU member state.

It is important to note that crypto firms that do not offer exchange services or wallets are not directly out of scope of financial supervision. Depending on your activities, other financial legislation may apply. You may for example be confronted with the prohibition on attracting redeemable funds, with the MiFID-II requirements for investment firms,  PDD-II requirements for payment services or with the AIFMD-rules for alternative investment funds.

License requirements

Most of the requirements for obtaining a crypto license can be found in the Wwft. In short, this act states that the firm must perform (integrity) risk analyses, must perform customer due diligence, must monitor the transactions of its clients and must notify the Financial Intelligence Unit of any unusual transactions. To be capable of complying with these requirements, it is important that the senior management of the firm is sufficiently knowledgeable. Not just with regard to the technology the crypto firm uses, but also with regard to the Wwft.

Risk based approach

All firms in scope of the Wwft have to apply the Wwft rules using a risk based approach. That is:  if there is a high risk on money laundering or terrorism financing for a certain client or transaction, the firm must perform more elaborate (also: ‘enhanced’) due diligence on this client or this transaction.

The risk assessment must be based on the risk factors as listed in the Annexes to the Anti Money Laundering Directive. These factors clarify that crypto transactions are almost always associated with ‘high risk’. This is because many crypto transactions are executed online, and it is relatively easy for parties to remain anonymous. Consequently, the risk on money laundering or terrorist financing is relatively high. This implies that crypto firms will usually have to perform enhanced due diligence on their clients and transactions.

Apply timely

Firms who become subject to the license obligation under the Wwft will have to apply for their license with The Dutch Central Bank (DNB). DNB will then evaluate whether the firm meets the requirements to adequately counteract money laundering and terrorism financing. DNB will also test whether the senior management of the firm is fit and proper (in Dutch: ‘geschikt en betrouwbaar’).

Being involved in activities for which a license is required, without having a license, is illegal. If your firm does not obtain a license timely, the firm may be forced to interrupt its activities abruptly as soon as the license obligation enters into force. It is therefore recommendable that if the firm needs a license, you start the license application process as soon as possible.

More information?

Would you like to find out whether the license obligation – or other financial legislation – applies to your firm? Would you like support in applying for a license? Or do you have questions on how to integrate risk based client due diligence and transaction monitoring into your business operations? Charco & Dique would be glad to help you with all of your questions about crypto activities and services. 


Is your firm currently engaged in crypto currencies, or are you planning to be so? In the near future, you might need a license for that. Read more