Dutch Crypto Companies Secure Legal Victory Over $2.3 Million Regulatory Fees

In a significant legal development, Dutch crypto firms, including Bitvavo and Coinmerce (successor to Binance), have achieved a partial legal victory in their ongoing battle against regulatory fees amounting to $2.3 million, imposed by Dutch authorities.

The Ruling

A Rotterdam court ruled that the Dutch central bank (DNB) had exceeded its legal authority by charging crypto companies for registration related to anti-money laundering (AML) purposes. The court stated that the DNB’s assessment of registration requests went beyond the scope of registration obligations set out in European Union AML laws. As per the current crypto regulations, the court emphasized that it was not legally permissible to levy supervisory costs on cryptoservice providers for the year 2021.

Impact and Ongoing Cases

The court’s decision still upholds that crypto companies should remain under supervision, but it affects costs for the year 2020. A separate legal case is ongoing regarding fees for the year 2022.

Background

The Netherlands has taken a strict stance on crypto companies, imposing hefty fines on platforms like Coinbase and Binance for failing to register. Gemini announced its withdrawal from the Dutch market due to regulatory constraints, and Binance transferred its Dutch user base to Coinmerce as part of its exit strategy.

Patrick van der Meijde, president of the United Bitcoin Companies of the Netherlands (VBNL), an industry group coordinating the complaint, expressed satisfaction with the court’s ruling. He highlighted that the registration obligations resulting from EU AML legislation had been violated in the Netherlands, and the substantial costs incurred should not have been passed on to crypto companies.

The Dutch central bank, in response, noted that it would consult further with the finance ministry regarding the ruling. They maintained that they had acted in accordance with Dutch laws and regulations, emphasizing their mandate to provide effective AML supervision over the crypto sector and other financial institutions.

European Regulatory Landscape

Financial regulators in Europe typically do not rely on taxpayer funding but rather charge operational costs to supervised entities based on their size. The total crypto supervisory fees in 2022 amounted to 2.2 million euros (.3 million), with this figure increasing each year, according to van der Meijde.