The Netherlands’ AMLD5 Interpretation Appears to Be Killing Crypto Firms

The announced closure of one-man bitcoin startup Bittr may be the first of many in the Netherlands as contentious new AMLD5 regulations come into effect.

AccessTimeIconApr 27, 2020 at 8:00 a.m. UTC
Updated Dec 12, 2022 at 12:56 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

The Dutch crypto market is seeing the first of most likely many small crypto exchanges get squeezed out following the passage of heavily criticized anti-money laundering (AMLD5) regulations.

Announced Friday in a company blog, Bittr founder Ruben Waterman said his bitcoin exchange, launched in 2018, will shut down by April 28 as the one-man operation does not have the capital to meet the new regulations. The Dutch National Bank (DNB) estimates that registration alone costs $36,500, in addition to rolling compliance needs.

The development shows what Dutch regulators expect of financial upstarts and could speak to future hurdles to cryptocurrency development in the greater European Union.

“Above all, Bittr would have to appoint a dedicated compliance officer who’s responsible for compliance with the new regulations,” Ruben wrote Friday. “Who can I appoint? Myself? That probably doesn’t work also being the sole shareholder and director.”

Under Dutch law, businesses pay for their own regulations out of pocket. Ruben said the options for his bitcoin savings platform included keeping a lawyer on retainer, paying a compliance officer or finding a third party to manage compliance costs in addition to the government registration fee – impossible, he said, given the firm’s small size.

Making sense of it all

As CoinDesk reported in December, Dutch cryptocurrency firms were entangled in a protracted battle of semantics with the DNB and Ministry of Finance (FIN) over the implementation of the European Union’s 5th Anti-Money Laundering Directive (AMLD5), which went into effect in January 2020.

Bitcoin firms CoinDesk spoke with said the DNB and FIN were strengthening the EU directive needlessly while using doublespeak with the Dutch Parliament. The firms alleged the financial regulators had created a de facto licensing regime whereas AMLD5 calls for mere registration of cryptocurrency firms. These allegations were further supported by the Dutch Council of State, a governmental advisory board widely respected in the country, which asked the finance agencies to clarify their proposals.

Members of the Dutch Parliament held two competing priorities in mind: fighting money laundering and supporting the nation’s fintech firms.

In a Parliamentary report from April 21, Dutch Senator Bastiaan van Apeldoorn said it's unlikely cryptocurrencies are being used on the same scale as cash for money laundering, but they still require supervision.

Finding a soft regulatory touch that wouldn’t displace small players in the market remained the goal, he said.

“The cryptocurrency phenomenon does exist and is likely to take on even larger, if not different, forms in the future. It is therefore good that this is also adequately regulated with regard to money laundering,” van Apeldoorn said. (Editor’s note: This report was translated.)

The legislation was tied up on the point for months, even though the EU called for the directive to go into effect on Jan. 10. Legislation was finally adopted last Tuesday, although opinions on its outcome differ.

Wrote Bittr’s Ruben:

“The Minister of Finance (Wopke Hoekstra) then changed some wording so as to comply with the Council of State’s request but not actually changed any of its content. The Senate has raised questions about this practice but nevertheless approved the new regulations.”

The registration process was still a licensing regime, verbiage aside, Ruben argued. “If it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck,” he wrote.

Other players

In a blog post last Wednesday, Bitonic, a Dutch exchange led by Daan Kleiman, who also heads a crypto lobbying group VBNL, said the final legislation “resolved the two main issues of concern for Bitonic.” The firm said the DNB and FIN had clarified the difference between licensing and registration plus the associated regulatory costs.

“We will closely monitor this when the law has entered into force, but it appears that for now, the threat of an excessive and costly supervisory regime is off the table,” Bitonic wrote.

Some firms haven't waited to see what the DNB and FIN would concoct, however. Industry-leading crypto derivatives exchange Deribit left the country for Panama in February, citing uncertainties around the incoming regulation.

“We believe that crypto markets should be freely available to most, and the new regulations would put too-high barriers for the majority of traders, both regulatory and cost-wise,” Deribit wrote in a January blog post announcing the move.

Arthur Stolk, managing director of Dutch cryptocurrency fund Icoinic, told CoinDesk in an interview that most firms had anticipated the passage and are going to wait it out until a promised evaluation by FIN takes place. His largest concern for smaller firms is with the flat regulatory fee every market participant now has to pay for oversight, as compared to a per-volume cost applied in most cases.

“The problem is that in normal traditional finance, if you are regulated and you have a license you need to pay by your volume. So, it's a fair deal. Now everyone pays the same. In one year they do the evaluation – please do it by volume because then all the small projects can stay,” Stolk said.

And, unlike other governments, the Netherlands isn’t behind the times on crypto. In fact, it’s trying to lead the charge in the EU for issuing a central bank digital currency (CBDC), according to a recent DNB report

“If the decision should be taken within the euro system to experiment with a more concrete type of CBDC, we are ready to play a leading role,” the DNB wrote in its 45-page report published last week. “The Netherlands provides a suitable testing ground for such an experiment.”


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.