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Netherlands

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#53
Version
Archived
Created
2025-04-12 06:41
Workflow Stage
Live

Executive Summary

Retail cryptocurrency trading is permitted in the Netherlands but is subject to regulation, primarily through the implementation of AML/CFT measures and the recent introduction of MiCA. Initially, De Nederlandsche Bank (DNB) oversaw crypto-asset service providers (CASPs) under the Money Laundering and Terrorist Financing Prevention Act (Wwft), implementing AML/KYC requirements. However, the Autoriteit Financiële Markten (AFM) is now the primary licensing and supervisory body for CASPs under MiCA. The legal classification of crypto assets is as assets for tax purposes, subject to wealth tax.

Key Pillars

The primary regulator is now the Autoriteit Financiële Markten (AFM), which is responsible for issuing MiCA licenses to CASPs and supervising their conduct. DNB remains the supervisor for specific types of stablecoins (Electronic Money Tokens and Asset-Referenced Tokens) and assesses proposed qualifying holdings in CASPs. Core compliance requirements include AML/CFT obligations (KYC procedures, transaction monitoring) under the Money Laundering and Terrorist Financing Prevention Act (Wwft) and adherence to MiCA regulations. CASPs require a license to operate, transitioning from DNB registration under Wwft to AFM licensing under MiCA, with a deadline of June 30, 2025, for existing DNB-registered entities to obtain a MiCA license.

Landmark Laws

  • Fifth Anti-Money Laundering Directive (AMLD5): Implemented in 2020, bringing certain crypto-asset service providers (CASPs) under regulatory scrutiny.
  • Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme - Wwft): Amended to incorporate AMLD5, requiring CASPs to register with DNB and comply with AML/CFT obligations.
  • Markets in Crypto-Assets Regulation (MiCA): Entered into force, with most provisions applying from December 30, 2024. Requires CASPs to obtain a license to operate within the EU, including the Netherlands.

Considerations

Cryptocurrencies are treated as assets for tax purposes in the Netherlands and are subject to wealth tax (Box 3) based on their value on January 1st of the tax year. Gains from mining may be taxed as income. Both DNB and AFM actively warn consumers about the high risks associated with crypto-assets, including volatility, fraud, deception, manipulation, and cybercrime. Operational challenges include the need for CASPs to obtain MiCA licenses, with a deadline of June 30, 2025, for those previously registered with DNB.

Notes

The regulatory environment is undergoing a transition from DNB supervision under Wwft to AFM supervision under MiCA. The Netherlands has opted for a shortened transitional period under MiCA, requiring existing DNB-registered CASPs to obtain a MiCA license from the AFM by June 30, 2025. Applications for MiCA licenses have been accepted by the AFM since April 22, 2024. Both DNB and AFM actively warn consumers about the high risks associated with crypto-assets.

Detailed Explanation

Retail cryptocurrency trading is legal in the Netherlands, but subject to increasing regulation. Since 2020, the regulatory landscape has been shaped by the implementation of the EU's Fifth Anti-Money Laundering Directive (AMLD5) into Dutch law, through amendments to the Money Laundering and Terrorist Financing Prevention Act (Wwft). This initially brought crypto-asset service providers (CASPs) offering exchange services between virtual and fiat currencies, and custodian wallet providers, under the supervision of De Nederlandsche Bank (DNB). DNB registration, effective May 21, 2020, focused on integrity supervision, including AML/CFT compliance (KYC, transaction monitoring) and sanctions regulations. The EU's Markets in Crypto-Assets Regulation (MiCA) is now transforming the environment, aiming for a harmonized EU-wide regulatory framework. MiCA came into force, with most provisions applying from December 30, 2024. Under MiCA, CASPs now require a license to operate in the EU, including the Netherlands. The Autoriteit Financiële Markten (AFM) is now the primary authority for issuing MiCA licenses and supervising CASPs, while DNB retains supervisory responsibility for specific stablecoins (Electronic Money Tokens and Asset-Referenced Tokens) and assesses proposed qualifying holdings in CASPs. The Netherlands has opted for a shortened transitional period; DNB-registered CASPs must obtain a MiCA license from the AFM by June 30, 2025 to continue operations. Applications for MiCA licenses have been accepted by the AFM since April 22, 2024. Both DNB and AFM actively warn consumers about the high risks associated with crypto-assets (volatility, fraud, deception, manipulation, and cybercrime). MiCA introduces stronger consumer protection rules (clear advertising, rules against misleading practices, and potential compensation in case of hacks for licensed providers). Cryptocurrencies are treated as assets for tax purposes and are subject to wealth tax (Box 3), based on their value on January 1st of the tax year; mining gains may be taxed as income.

Summary Points

Retail Cryptocurrency Trading Status in the Netherlands (April 12, 2025)

1. Overall Regulatory Status: Allowed-Regulated

  • Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • The Dutch government regulates crypto activities rather than prohibiting them.

2. Key Regulatory Bodies and Their Roles:

  • De Nederlandsche Bank (DNB) - Dutch Central Bank:
    • Pre-MiCA: Responsible for registering and supervising crypto-asset service providers (CASPs) under the Wwft (Dutch AML/CFT Act) based on AMLD5. Focused on AML/CFT compliance.
    • Post-MiCA: Supervises specific types of stablecoins (Electronic Money Tokens and Asset-Referenced Tokens). Assesses proposed qualifying holdings in CASPs.
  • Autoriteit Financiële Markten (AFM) - Dutch Authority for the Financial Markets:
    • Post-MiCA: Primary authority responsible for issuing MiCA licenses to CASPs in the Netherlands. Supervises CASP conduct and compliance with MiCA regulations.

3. Important Legislation and Regulations:

  • Money Laundering and Terrorist Financing Prevention Act (Wwft):
    • Dutch implementation of the EU's Fifth Anti-Money Laundering Directive (AMLD5).
    • Requires registration with DNB for certain CASPs (fiat-to-crypto exchanges and custodian wallet providers).
  • Markets in Crypto-Assets Regulation (MiCA):
    • EU regulation creating a harmonized framework for crypto-assets and CASPs.
    • Requires CASPs to obtain a license to operate within the EU, including the Netherlands.
    • Introduces stronger consumer protection rules.

4. Requirements for Compliance (CASPs):

  • Pre-MiCA (under Wwft):
    • Registration with DNB.
    • Compliance with AML/CFT obligations, including:
      • Know Your Customer (KYC) procedures.
      • Transaction monitoring.
      • Sanctions regulations.
  • Post-MiCA:
    • Obtain a MiCA license from the AFM (or another EU supervisory authority).
    • Comply with MiCA regulations, including:
      • Clear advertising requirements.
      • Rules against misleading practices.
      • Potential compensation for hacks.

5. Notable Restrictions or Limitations:

  • High Risks: DNB and AFM actively warn consumers about the high risks associated with crypto-assets (volatility, fraud, manipulation, cybercrime).
  • Taxation: Cryptocurrencies are treated as assets for tax purposes and are subject to wealth tax (Box 3). Gains from mining may be taxed as income.

6. Recent Developments or Changes:

  • MiCA Implementation: MiCA entered into force, with most provisions applying from December 30, 2024.
  • Shift in Supervision: The AFM is now the primary authority for licensing and supervising CASPs under MiCA.
  • Transitional Period: The Netherlands has opted for a shortened transitional period under MiCA.
    • Existing DNB-registered CASPs must obtain a MiCA license from the AFM by June 30, 2025, to continue providing services.
    • Applications for MiCA licenses have been accepted by the AFM since April 22, 2024.

Full Analysis Report

Report: Retail Cryptocurrency Trading Status in the Netherlands

Report Generated: April 12, 2025

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the Netherlands are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status: Allowed-Regulated

2. Narrative Explanation:

Individual citizens and residents in the Netherlands are legally permitted to buy, sell, and hold cryptocurrencies. There is no specific legislation prohibiting these activities for retail investors. The Dutch government and financial authorities have acknowledged the existence and use of cryptocurrencies, opting for regulation rather than an outright ban.

The regulatory landscape has evolved significantly since 2020 with the implementation of the EU's Fifth Anti-Money Laundering Directive (AMLD5) into Dutch law via amendments to the Money Laundering and Terrorist Financing Prevention Act (Wet ter voorkoming van witwassen en financieren van terrorisme - Wwft). This brought certain crypto-asset service providers (CASPs) under regulatory scrutiny for the first time. Specifically, entities providing exchange services between virtual currencies and fiat currencies, and custodian wallet providers operating in or from the Netherlands, were required to register with De Nederlandsche Bank (DNB), the Dutch Central Bank. This registration focused primarily on integrity supervision, ensuring compliance with AML/CFT obligations (like Know Your Customer - KYC procedures, transaction monitoring) and sanctions regulations.

While the DNB handled this initial registration based on AMLD5/Wwft, the regulatory environment is undergoing a major transition due to the EU's Markets in Crypto-Assets Regulation (MiCA). MiCA aims to create a harmonized and comprehensive regulatory framework for crypto-assets and CASPs across the EU.

Key points regarding the current and evolving regulatory environment:

  • Legality for Individuals: Buying, selling, and holding crypto remains legal for individuals.
  • Regulation of Service Providers (Pre-MiCA): Since May 2020, providers of fiat-to-crypto exchange services and custodian wallets have been required to register with DNB under the Wwft for AML/CFT supervision. This includes KYC/AML checks on customers.
  • Regulation of Service Providers (MiCA Transition): The EU's MiCA regulation entered into force, with most provisions applying from December 30, 2024. Under MiCA, CASPs require a license to operate within the EU, including the Netherlands.
    • The Autoriteit Financiële Markten (AFM), the Dutch Authority for the Financial Markets, is now the primary authority responsible for issuing MiCA licenses to CASPs in the Netherlands and supervising their conduct.
    • DNB remains the supervisor for specific types of stablecoins (Electronic Money Tokens and Asset-Referenced Tokens) and assesses proposed qualifying holdings in CASPs.
    • The Netherlands has opted for a shortened transitional period under MiCA. Existing DNB-registered CASPs must obtain a MiCA license from the AFM by June 30, 2025, to continue providing services. Applications for MiCA licenses have been accepted by the AFM since April 22, 2024.
  • Consumer Protection & Warnings: Both DNB and AFM actively warn consumers about the high risks associated with crypto-assets, including volatility, fraud, deception, manipulation, and cybercrime. MiCA introduces stronger consumer protection rules, such as requirements for clear advertising, rules against misleading practices, and potential compensation in case of hacks for licensed providers.
  • Taxation: Cryptocurrencies are treated as assets for tax purposes in the Netherlands and are subject to wealth tax (Box 3), based on their value on January 1st of the tax year. Gains from mining may be taxed as income.

In summary, while retail trading is allowed, the environment is strictly regulated, particularly for the platforms facilitating these trades. Service providers must adhere to robust AML/CFT requirements and are transitioning to a comprehensive licensing regime under MiCA, supervised primarily by the AFM.

3. Supporting Excerpts:

  • On Legality and AMLD5 Implementation: "Cryptocurrency transactions are allowed in the Netherlands... In 2020, the 5th Anti-Money Laundering Directive (AMLD5) came into force in the EU, leading the Netherlands to amend its Money Laundering and Terrorist Financing Prevention Act (Wwft). This means that the crypto industry is no longer in a legal gray area, and now must fulfill several conditions to be able to provide services to Dutch clients." (Source: Sumsub, Jan 2023)
  • On DNB Registration (Pre-MiCA): "With effect from 21 May 2020, firms providing services for the exchange between virtual money (cryptos) and regular (fiduciary) money, and custodian wallet providers will become subject to DNB's integrity supervision, on the basis of the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financiering van terrorisme - Wwft)... This means they must register with DNB..." (Source: De Nederlandsche Bank - DNB)
  • On MiCA and Shift in Supervision: "Under MiCAR, the Dutch Financial Markets Authority (AFM) is the licensing authority for providers of (new) crypto services and is responsible for most of the regular supervision of compliance with the requirements applicable to these services... Under MiCAR, DNB is responsible for supervising the two different types of stablecoins: Electronic Money Tokens (EMTs) and Asset Referenced Tokens (ARTs)." (Source: De Nederlandsche Bank - DNB, MiCA page)
  • On MiCA Licensing and Transition: "As of 30 December 2024, providers of crypto-asset services must have a license from the AFM, or another European supervision authority, in order to (continue to) offer these services. For DNB-registered crypto companies, a license from the AFM or another European supervision authority is required as of 30 June 2025." (Source: Autoriteit Financiële Markten - AFM, Crypto companies page)
  • On Shortened Transition Period: "The AFM is operating a six-month transitional period that will end on June 30 2025, substantially shorter than the 18-month transitional period permitted under MiCA. All Dutch CASPs and EU CASPs in non-Netherlands countries wishing to provide services to Dutch users will need to have their MiCA license in place by this date." (Source: Wyden, Jan 2025)
  • On MiCA's Impact: "The European Commission introduced a regulation to regulate the crypto market. This is the Markets in Crypto Assets Regulation (MiCAR or MiCA regulation)... As a result, new rules have been implemented... You may only provide crypto-assets in the European Union with a CASP licence... Crypto -assets and crypto companies are under the supervision of the Dutch Authority for Financial Markets (AFM)." (Source: Business.gov.nl)

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