Two ministers from the Netherlands have called for regulating the cryptocurrency sector to help the nation fight against money laundering. Minister of Finance Wopke Hoekstra and Minister of Justice and Security Ferdinand Grappherhaus want to limit risks in the cryptocurrency industry, according to a note sent to the parliament on Monday.
What Does the Letter Suggest?
The five-page letter sent to the chairman of the government suggests that “crime cannot pay” in the country, or Europe. It further highlighted that criminals could use money laundering to stay out of the ambit of the government’s regulations. They can thus make use of the proceeds without hindrances, some of which could also be used to finance new criminal activities.
The ministers also wrote that criminals using the financial system to hide their criminal proceeds are compromising its integrity and security. They noted, “Money laundering is an immense and complex problem, and it is therefore very important that combating money laundering in a joint and effective way.”
How to Solve Money Laundering?
The ministers suggest the government to follow a three-pronged approach to tackle money laundering, one of which was to regulate digital currency service providers- includes exchanges and wallets. They also note that the Dutch government should follow the standards set by the Financial Action Task Force (FATF) for crypto services and ICOs.
The FATF said that crypto service providers must share information about customers when transferring funds between one another. Information shared between the service providers include the sender’s name, physical address, identification information, account number, etc. The receiver’s account name and name should also be shared. These are standard practices in the world of traditional finance. However, most cryptocurrencies run on an anonymized digital ledger in the name of privacy.
The authorities also need to invest in projects that could help in combating criminal funds and digital coins. The ministers further note that the €500 banknote should be removed from circulation and cash payments for all transactions over €3,000 should be banned.