Dutch Bitcoin exchange Bitonic has filed a preliminary injunction in a Rotterdam court seeking the suspension of a wallet verification rule promulgated by the central bank.
In November 2019, De Nederlandsche Bank, or DNB, commissioned crypto exchanges to ensure their users adhere to rigorous Know Your Customer protocols. Those rules included verification steps for withdrawal wallets, which Bitonic called a nuisance.
At the time, Bitonic was just one of three licenses granted by the DNB for 38 applications to central banks through crypto exchanges. Indeed, 25 of the 38 applicants also sent a joint letter to the DNB requesting greater clarity on the need for such rigorous compliance protocols.
According to the company’s announcement, the DNB did not respond to concerns raised by Bitonic about the controversial KYC rule. The exchange also revealed that an independent compliance firm recently provided expert advice on the matter, saying the central bank’s actions have no legal basis.
For Bitonic, the introduction of a full wallet verification protocol violates existing customer privacy laws. “We believe it is critically important that a judge review DNB’s position so that it becomes clear whether the demands are legitimate,” the company added in its announcement.
Commenting on the purpose of the trial, the Bitonic ad reads as follows:
“Our goal is to be able to quickly stop the overall processing of personal data that is imposed on us. We want to go back to the situation where we ourselves determine, based on risk, whether we ask the client to prove their portfolio management. “
As previously reported by TBEN, the additional KYC requirements are causing some dissatisfaction among some crypto traders across the country. Bitstamp has been criticized for the perceived lack of hindsight by the exchange against DNB policies.
Neither DNB nor Bitonic immediately responded to TBEN’s request for comment.