When the crypto space grows, fear of it seems to grow as well, and in the case of regulators in the Netherlands, fear that people will use crypto for illicit purposes is a very real thing.
The Netherlands Is Taking Matters Into Its Own Hands
Dutch Ministers are submitting an age-old argument that cryptocurrencies can somehow be used for money laundering purposes. In truth, this is a relatively out-of-date argument to pose, but one that still holds occasional roots. Recently, Live Bitcoin News reported that the company Bestmixer.io was shut down due to implications that it was mixing illicit forms of crypto with “honest coins,” thereby washing the dirty money clean in what can be considered a classic example of money laundering.
Following this news, it appears the Netherlands is worried similar cases will occur. Legislators have now sent a letter to the country’s parliament asking that they be allowed to monitor and regulate cryptocurrencies as a means of tackling and stopping money laundering within the nation’s borders before it becomes an even bigger problem.
The five-page letter suggests that regulators want to be the leaders in Europe when it comes to monitoring crypto and ensuring it’s used safely and correctly. The document reads:
Crime cannot pay. Not in the Netherlands, not in Europe, and not globally. This makes it possible for criminals to stay out of the reach of the government and to enjoy those proceeds undisturbed. These illegal proceeds can also be used to finance the same or new criminal activities… Criminals who use the financial system to disguise their criminal proceeds seriously compromise the integrity and security of the financial system. Money laundering is an immense and complex problem and it is therefore very important that we combat money laundering in a joint and effective way.
The letter also suggests several methods of monitoring crypto, one of which involves examining all wallet holders and exchanges within the country. In addition, regulators are also seeking to limit initial coin offerings (ICOs), which have earned something of a strained reputation since they first emerged as popular methods of fundraising a few years back.
ICOs Have Lost Some of Their Steam
ICOs have become very common amongst startups – predominantly technology startups – seeking to garner capital for their operations. Typically, they work when a company offers an investors access to a new crypto coin in exchange for funds. This coin will provide users with a path to the company’s services and products.
Unfortunately, many of these companies disappear within months of hosting their ICOs, usually because they are fraudulent or phony, or because the funds they receive are not strong enough to stay in business. Investors are typically gypped in the end, stuck with a coin they can’t use, lighter pockets and bruised egos.