Netherlands-Based Coinbase Customers Required to Submit KYC Data When Transferring Crypto off the Platform

Coinbase recently applied know-your-customer (KYC) guidelines to its non-guardian wallets to comply with the 1977 Sanctions Act, and Dutch The company announced that it plans to introduce a number of changes for its customers. If a person residing in the Netherlands wants to send crypto to a third-party wallet via Coinbase, they will need to identify the name of the wallet owner, the purpose of the transfer, and the full residential address of the recipient.

On June 27, Coinbase Says KYC Info Will Be Required in the Netherlands for Outgoing Crypto Transfers

in the Netherlands; Coinbasecustomers may have difficulty sending funds to third parties or people with non-custodial wallets if they do not provide KYC information Starting June 27, 2022, Coinbase will require that users from the Netherlands required to provide KYC data if they plan to send crypto to a wallet outside the Coinbase platform.

Coinbase said the new rules will apply because the company needs to comply with local regulations. The Sanctions Act of 1977, coupled with the Money Laundering and Terrorist Financing Prevention Act (Wwft), requires virtual asset service providers (VASPs) to provide KYC data on outgoing transactions involving non-protected persons and third party wallets.

The 1977 Sanctions Act is codified by the Netherlands Financial Markets Authority (AFM) and the Dutch Central Bank (DNB). This means that Coinbase, or the Dutch VASP for that matter, must identify to whom the crypto transfer is going and the purpose of the transaction.

If Coinbase applies the new rules to its Dutch customers, they can check a box pointing out that the transfer is being sent to themselves. However, if a Coinbase customer in the Netherlands wants to send funds to another individual outside of Coinbase, they will need to provide ID details.

Jeff Garzik expects KYC rules to extend beyond the Netherlands

Ablog postto Coinbase’s Dutch customersstates that they need to provide “full name,” “purpose of transfer,” and “full residential address of the recipient.” If they don’t know the address, they need to stop and get the information before proceeding.

“Additional information must be collected for all transactions in which a Dutch customer sends crypto from a Coinbase exchange account to an address not controlled by Coinbase,” the crypto trading platform blog post explains.

The new rules are only for Dutch customers, but there are concerns that the regulatory approach could happen in other countries.

“For now it’s just the Netherlands, but expect this to expand,” said former Bitcoin Core developer Jeff Garzik on Twitter. “Don’t blame Coinbase – they know it goes against most crypto users and would never do this voluntarily. Enforcing the travel rule will be an ugly battlefield – the LEA wants to monitor all parties to every transaction.”

Garzik Addendum:

Current Cloud Advice Always deposit from your own wallet and withdraw to your own wallet. It’s a good idea for security, privacy, accounting reasons, and for legal reasons.

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