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07 November 2019 Supervision Supervision label Factsheet

The transaction monitoring process must be risk-based and must match the outcomes of the crypto service provider's risk analysis. Risk-based means that the transaction monitoring process is clearly based on the risk sensitivity to money laundering or terrorist financing of the type of customer, business relationship, product or transaction.

In practice, most crypto service providers will use automated systems to perform transaction monitoring. Based on business rules in the form of scenarios and threshold values, the system generates alerts for specific indicators. An alert is a signal that indicates a potentially unusual transaction. In addition to this, more advanced systems may be needed, and in applicable cases may be essential, depending on the nature and the size of the transactions and the nature of the institution in question.

Based on the presence of specific indicators in customer transactions, a crypto service provider may have to conduct a more in-depth investigation to assess whether transactions should be earmarked as unusual. Such an in-depth investigation may entail requesting information from the customer, looking further ahead or back in the transaction chain, or requesting information from other service providers. Investigations must be appropriate to the risk sensitivity of the customer and transaction in question.

The findings of the investigation of the alerts must be adequately and clearly recorded. If the investigation reveals that a transaction can be earmarked as unusual, the crypto service provider must report it to FIU-NL without delay. It must clearly explain and document its considerations and decision-making process for reporting or not reporting a transaction. In cases of doubt, the service provider should always report the transaction to FIU-NL.

sector

  • Crypto service providers