Dutch Crypto Companies Score Legal Win in Fight Against $2.3M Supervision Bill

Dutch crypto companies including Bitvavo and Binance successor Coinmerce have scored a partial legal win in their fight against $2.3 million in fees imposed by Dutch regulators.

The Dutch central bank (DNB) went beyond legal powers in charging companies to register for anti-money laundering purposes, a Rotterdam court said in two judgments issued on Wednesday.

“The way in which DNB assesses registration requests is contrary to the scope of the registration obligation for crypto service providers” set out in European Union anti-money laundering laws, the court said, adding that under current crypto regulations “it is not possible to lawfully charge supervisory costs for the year 2021 to crypto service providers.”

The legislation is still consistent with general norms of good governance, and the companies should still be regarded as under supervision, the judges said. The ruling has no bearing on costs for 2020, judges said, and a separate legal case is still ongoing for 2022 fees.

The Netherlands, which will shortly have to apply the EU’s tough Markets in Crypto Assets licensing regime, has taken a tough line on crypto firms, imposing millions of euros of fines on Coinbase and Binance for failing to register. Crypto exchange Gemini recently announced it’s quitting the country due to DNB strictures, and Binance transferred its Dutch customers to Coinmerce as it did likewise.

Patrick van der Meijde, president of the United Bitcoin Companies of the Netherlands (VBNL), the industry grouping which coordinated the complaint, said his organization was “pleased that the court has found that the registration obligation as resulting from [EU anti-money laundering legislation] has been violated in the Netherlands."

“The great costs of this should not have been passed on, because they fall outside DNB's mandate,” van der Meijde added.

A spokesperson for the DNB told CoinDesk it had taken note of the ruling and would consult further with the finance ministry on the issue.

The central bank had complied with Dutch laws and regulations, the DNB spokesperson said, adding that the ruling “confirms our mandate to provide adequate money-laundering supervision of the crypto sector” as well as for other financial institutions.

Financial regulators in Europe are generally not taxpayer-funded, and charge operational costs to supervised entities in proportion to their size. Total crypto supervisory fees in 2022 were 2.2 million euros ($2.3 million), a number which increases each year, van der Meijde said.

UPDATE (Oct. 5, 10:48 UTC): updates subheading, second paragraph to refer to anti-money laundering

UPDATE (Oct. 5, 13:00 UTC): adds statement from DNB.