The Dutch finance ministry has rejected multiple requests from the Netherlands Authority for the Financial Markets (AFM) for extra funding to oversee the cryptocurrency sector, according to a local report.
The report, which quoted government documents, noted that the ministry has also imposed limits on the contributions that the AFM can request from the sector itself.
The AFM had argued that it needs extra funds to fulfill new responsibilities arising from the upcoming EU legislation on cryptocurrency, Markets in Crypto-Assets (MiCA), set to take effect at the end of this year.
The nearly 300 pages of documents also revealed that the ministry does not share the AFM’s level of concern about crypto-related fraud. One document states, “Given the risks in the crypto sector… we advise going for the minimum scenario.
” The finance ministry deems a government contribution as “politically unachievable” and advocates for minimal regulation.
Meanwhile, the AFM has contended that this approach is insufficient for effective oversight. It reportedly stated that it would prioritize issues causing the most harm to consumers, investors, and market participants, but it declined to comment on the finance ministry’s position.
Also, experts and organizations like the Trimbos addiction centre reportedly expressed surprise at the ministry’s reluctance, warning that this could result in “sub-optimal supervision.”
The Netherlands has taken a cautious stance on cryptocurrency regulation, imposing fines on exchanges for non-compliance with local registration and anti-money laundering rules. The Dutch central bank, De Nederlandsche Bank (DNB), recently labelled KuCoin as an unlicensed exchange providing illegal services in the country. The DNB emphasized that KuCoin’s operations do not comply with the Netherlands’ Anti-Money Laundering and Anti-Terrorist Financing Act, barring it from offering crypto services within the jurisdiction.
Previously, the DNB fined Binance, the world’s largest crypto exchange, over 3.3 million euros for offering services without the necessary registration, describing it as a “very serious” violation.
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