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22 April 2022 Supervision Supervision label Factsheet

Providers of exchange services between virtual currencies and fiat currencies and custodian wallet providers are called on to make themselves known to DNB before 23 September 2019.

1. Who do we require notifications from?

We request those parties that will soon be subject to Wwft supervision to make themselves known to us before we issue the formal registration request by filling in this form and send it to crypto@dnb.nl. Under the legislative proposal, the following parties need to register with us once the Act comes into effect:

  • anyone offering services for the exchange of virtual and fiat currencies in, or from, the Netherlands in a professional capacity or on a commercial basis;
  • anyone offering custodian wallets in, or from, the Netherlands in a professional capacity or on a commercial basis.

In the Explanatory Memorandum, further clarification is provided on how the above-mentioned definitions are to be understood. “Anyone” refers not only to natural persons, but also to legal persons and companies. Concerning the wording “in a professional capacity or on a commercial basis”, the Explanatory Memorandum notes that for determining whether an activity is carried out on a professional/commercial basis, it is important that it is more than just an occasional activity and that the provider receives remuneration or generates income from it.

A custodian wallet provider is considered as such under the legislative proposal “if it is in a position to (independently) access the user's virtual currency”. According to the legislative proposal, having access means being able to “hold, store and transfer virtual currencies”. If the provider has access to the user's virtual currency in some other way, it is also considered as a custodian wallet provider.

Providers of exchange services between virtual and fiat currencies include not only exchanges and intermediaries, but also providers of Automated Teller Machines (ATMs) that make such exchanges possible. “The person effectively operating the ATM is considered to be the provider of the exchange service”, according to the Explanatory Memorandum to the legislative proposal.

For both types of providers, on the basis of the legislative proposal, whether they are domiciled in the Netherlands is irrelevant. Providers who offer such services in the Netherlands from another EU Member State (including EEA), for example via a website, must also register irrespective of whether the service provider has its registered offices in that Member State. According to case law, an important consideration regarding whether a service provider provides services in the Netherlands is whether it has “expressed its intention to engage in commercial relations with consumers in one or more Member States [other than that in which the provider itself is resident or domiciled], including the Member State where the consumer is resident. The Explanatory Memorandum to the legislative proposal provides further clarification on when a party is assumed to be offering services in a particular Member State. Providers who aim to provide services overseas from the Netherlands must also register. Provision of such services in the Netherlands from a third country (outside of the EEA) is in principle forbidden: a registration cannot be acquired by providers without a domiciliation in the EU (incl. EEA), unless the home state is by the minister by ministerial decree appointed as a state where similar legislation and supervision is applicable.

Even if you already have a licence or an exemption from DNB or the AFM, for example under the Financial Supervision Act (Wet op het financieel toezicht – Wft), we would like to know whether you engage in or are intending to engage in activities relating to these two types of services.

If you are in any doubt as to whether you will need to register based on the services you offer, please contact us.

2. If I notify DNB now, does that mean I am a registered provider under the Wwft? 

No. This request is in order to get a clearer picture of the number of service providers and to be able to contact these parties with information in the future. At a later stage we will notify these parties about the registration requirement, the necessary steps they must take, and when they can register.

3. What will DNB do with my data?

We are collecting these data for two reasons. First, we will use the information requested to draw up an inventory of the number of parties that will become subject to supervision under the Wwft and the number of management board members whose fitness and propriety will need to be assessed. This inventory is for internal use. The names of these institutions and persons will not be published. We may however publish aggregated data, that cannot be traced back to individual institutions, on the number of providers operating in or from the Netherlands. Second, the data will be used to notify parties about the registration requirement and other developments linked to the legislation and regulations coming into effect. This is why we are asking for you to provide names and contact details.

Your data will be handled with the utmost care. On our website you can find a Privacy Statement explaining how DNB handles personal data when carrying out its various duties.

4. What do the new requirements mean for providers of exchange services between virtual and fiat currencies and custodian wallet providers?

From the moment the Act comes into effect, the parties listed under Question 1 are required to comply with the requirements of the Wwft and the Sw. The Wwft includes requirements on conducting customer due diligence and the reporting of unusual transactions. In addition parties will have to carry out a risk analysis tailored to their business operations. Unusual transactions will have to be reported to FIU-the Netherlands. Pursuant to the revised Wwft, providers of exchange services and custodian wallets will also need to have sound and ethical business operations and fulfil requirements for a transparent control structure. Under the Sw parties must screen transactions against sanctions lists.

Although at a later stage we will contact parties about how to fulfil the requirements and they will also be included in secondary legislation that is to be drawn up, please be aware that you must comply with these requirements once the Act enters into force. This will still apply even if you have not registered yet. Pursuant to the legislative proposal, if you wish to continue to conduct your activities after the act comes into effect, you must have submitted a request for registration to DNB. This registration, including the assessment of the day-to-day policymakers, must be completed within six months. During those six months you must already fulfil the requirements under the Act. If you have not submitted a request for registration by the time the Act comes into effect, you must cease to provide your services.

5. Why is DNB already asking for notification now?

The Anti-Money Laundering Directive giving rise to these requirements has to be implemented as of 10 January 2020. The aim is for the amended Act to enter into force on that date. This means that the requirements apply as of that date, and that parties must also register as of that date.

In order to be adequately prepared for the registration requests and for the assessment of management board members, we are already asking parties to notify us now, so that we can take stock of their actual number. This will help us make all the right preparations for processing the registration and assessment requests once the Act comes into effect. Being adequately prepared will also help us process registration requests quickly.

In addition, in the coming months we wish to inform the sector about the upcoming registration requirement and enter into dialogue about the requirements arising from the Wwft. If you notify us, it will be easier for us to contact you. We would be interested to hear how you are preparing for the new requirements.

6. Am I obliged to comply with this request?

No, you are not obliged to comply with this request. This request is to enable us to better prepare ourselves and the parties that will be subject to our supervision for the requirements arising from the Act.

When the Act comes into effect, DNB will be the competent authority responsible for supervision. DNB's supervisors will then be authorised to request information and carry out investigations relating to compliance with the Wwft. This means that we will be able to ask you or your firm questions that you will have to answer, or carry out an investigation in which you are required to cooperate. It also means we can take enforcement action if you do not cooperate with such an investigation or if we discover breaches of the legal provisions falling under our supervisory responsibility.

For the sake of completeness, please note that once the Act comes into effect if you fall into one of the categories of providers listed under Question 1 you must register. If you fail to do so, you will be unable to continue to provide your services and we can take enforcement action. Pursuant to the legislative proposal, the registration, including the assessment of the day-to-day policymakers, must be completed within six months after the act comes into effect.

We will notify the parties at a later stage about our supervisory role and powers, and the registration process.

7. Why is DNB asking about the number of day-to-day policymakers and/or management board members in my firm?

This information will enable us to estimate how many people will need to be assessed once the new Act comes into effect. Assessment is an important precondition for requesting registration.

Pursuant to the legislative proposal, day-to-day policymakers of crypto service providers must be assessed for fitness and propriety. The propriety and fitness of the day-to-day policymakers is a precondition for registration. In order to assess their fitness, we establish whether the day-to-day policymakers have sufficient relevant knowledge and skills and display the required professional behaviour to perform the job. We determine this based on their education, work experience and competencies. Fitness assessments are specific to the position. This means that the assessment considers i) the specific position of the candidate ii) the nature, size, complexity and risk profile of the firm/company and iii) the composition and functioning of the board as a whole. Propriety is not linked to a particular position. In order to be able to establish that someone's propriety is beyond doubt, we look, for example, at criminal-law antecedents, by performing a criminal background check.

The company's management board members are always considered to be day-to-day policymakers. Any holders of qualifying holdings and internal supervisors must also be assessed.

More information about the assessments can be found here. Please note that this information may not yet be tailored to the type of services you provide.

8. Why is DNB asking about the number of internal supervisors in my firm?

Using this information we will be able to estimate how many people will need to be assessed when the new Act comes into effect. Assessment is an important precondition for requesting registration.

Under the legislative proposal, if there is a body within your organisation entrusted with the supervision of policy and general affairs, the members of this body must be assessed for fitness and propriety. The fitness and propriety of the internal supervisors is a precondition for registration. For the assessment of fitness we establish whether the person has sufficient relevant knowledge, skills and displays the required professional behaviour to perform the job. We establish this based on education, work experience and competences. Fitness assessments are specific to the position. This means that the assessment considers i) the specific position of the candidate ii) the nature, size, complexity and risk profile of the firm/company and iii) the composition and functioning of the board as a whole. Propriety is not function-related. In order to be able to establish that someone's propriety is beyond doubt, we look, for example, at criminal-law antecedents by performing a criminal background check.

A supervisory body could be, for example, a supervisory board or a supervisory committee. The day-to-day policymakers and anyone with a qualifying holding must also be assessed.

More information about the assessments can be found here. Please note that this information may not yet be tailored to the type of services you provide.

9. Why is DNB asking about the number of persons with a qualifying holding in my firm?

This information will enable us to estimate how many people will need to be assessed when the new Act comes into effect. Assessment is an important precondition for requesting registration.

Pursuant to the legislative proposal, anyone with a qualifying holding in your company must be assessed for propriety. This is a precondition for registration. In order to be able to establish that someone's propriety is beyond doubt, we look, for example, at criminal-law antecedents by performing a criminal background check.

In this context, a holder of a qualifying holding is understood to refer to persons “with a direct or indirect holding of at least ten per cent of the issued share capital or a similar holding”, or persons holding “directly or indirectly [...] at least ten per cent of the voting rights or [able to exercise] equivalent control”. Day-to-day policymakers and internal supervisors must also be assessed. The latter two categories of persons will be assessed for fitness as well as propriety.

More information about the assessments can be found here. Please note that this information may not yet be tailored to the type of services you provide.

10. I already have a licence from DNB or the AFM, should I still notify you?

Yes, please do so. Even if you already have a licence from DNB or the AFM pursuant to the Wft, the Act on the Supervision of Trust Offices (Wet toezicht trustkantoren – Wtt) or otherwise, we would appreciate your notifying us if you expect to be active as a provider of custodian wallets and/or exchange services between virtual and fiat currencies from 10 January 2020.

11. I am not yet active, but plan to be active as a provider of exchange services between virtual and fiat currencies and/or custodian wallets – should I still notify you?

Yes, please do so. If you are intending to be active as a provider of custodian wallets and/or exchange services between virtual and fiat currencies, then we would also appreciate it if you contact us. You can state this on the form.

Sector(s)

  • Crypto service providers