A recent update on the Bitonic website revealed that the cryptocurrency exchange had filed a preliminary injunction against the Dutch central bank (DNB) in the court of Rotterdam for the suspension of the wallet-verification requirement that the central bank enforced. 

The bank had requested additional verification measures from crypto exchange users on Bitcoin addresses, including proof of wallets. Customers would have to provide details like the reason for purchasing Bitcoins and the type of wallet they use. 

Further requirements to verify ownership of a bitcoin address include signing a message or uploading a screenshot from the users’ wallet interface. The stringent crypto regulatory protocol is peculiar only to the Netherlands as there are no other regulatory bodies in the whole of Europe mandating such requirements.

 On November 17, 2020, Bitonic, the oldest cryptocurrency exchange in the Netherlands became one of the 38 crypto service providers registered with the DNB. The additional verification measures were one of the policies adopted in the registration program; however, Bitonic has a contrary opinion. 

Backed up by expert advice from Bökkerink Compliance International, Bitonic termed the requirements as lacking “proper legal basis” and a violation of customers’ privacy rights and so they filed a request to DNB to revoke the requirements. 

Unfortunately for them, DNB denied the request with a referral to the Sanctions act pushing them to seek further legal intervention from a higher authority like a judge.

Bitonic is not the only cryptocurrency provider questioning the additional verification protocols. Last November, 25 out of the 38 registering parties raised some questions on the issue during the registration process and even sent a letter. Still, according to them, DNB has not provided satisfying answers and a reply to the letter.

According to Bitonic, they believe that it is their legal obligation to obey the anti-money laundering and sanction rules and also regular privacy regulations and not the additional ones that infringe on customers’ privacy and their human rights.

The exchange also added, “Our objective is to be able to quickly halt the comprehensive processing of personal data imposed on us. We want to return to the situation where we ourselves determine, on a risk-based basis, whether we ask the customer to prove his management of the wallet.” 

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