In the past year, Dutch financial authorities received hundreds of reports about possible abuses with cryptocurrencies. However, action was largely lacking.
Shady investment funds, worthless cryptocurrencies, pump & dumps: for unsuspecting consumers, there are the necessary dangers lurking in the world of cryptocurrencies. Citizens often report abuses to financial authorities, but they hardly act. ANP / Hollandse Hoogte / De Vries MediaDe Vries Media
BNR asked the Netherlands Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB) how many reports they received of abuses around cryptocurrencies. The AFM received 303 notifications in 2021, almost double the number in the previous year. The DNB speaks of ’10 to 12 e-mails and phone calls’ about cryptocurrencies per week, which amounts to more than 500 per year. ‘These are usually questions’, says spokesman Bouke Bergsma. Despite repeated requests, the DNB cannot say how often abuses are reported. DNB maintained twice
However, this deluge does not yield much concrete action on the part of the supervisors. According to them, this is the result of political choices. The AFM says it has no mandate in the field of cryptocurrencies. The DNB says that its enforcement around cryptocurrencies mainly focuses on the registration obligation for cryptocurrency exchangers. ‘There is therefore no supervision in the Netherlands, not even from DNB, that provides for, for example, the protection of the small investor’, says spokesman Bergsma ‘or any other form of regulation of the market.’
According to their own figures, the DNB took action to enforce this rule twice last year. This included an official warning to Binance.Crypto sector demands tougher action
‘Play for the stage’, says Simon Lelieveldt. The independent expert in the field of crypto regulation wonders why the DNB does not immediately issue fines to violators. ‘They let market parties in the Netherlands suffocate by not enforcing.’
The lack of supervision by DNB stings crypto companies the most. ‘You can see that the AFM itself takes a broader and more proactive approach to their task, while DNB does less than the minimum’, says Lelieveldt. Lelieveldt cites as an example the warning that AFM gave in December, for example, to so-called ‘finfluencers’. These would potentially break the law by advertising cryptocurrencies on social media. Nevertheless, here too it remained a warning.
Due to this lack of enforcement, consumers are easy prey for rogue crypto traders. For example, BNR previously revealed that thousands of young people purchased a token that was put on the market with the help of former Ajax director Marc Overmars, among others. “A totally non-product,” says Aäron Loupatty, creator of the Crypto Cowboys podcast. Loupatty identifies ‘a large grey area’ in cryptocurrency regulations in which criminal law offers no protection. ‘Cowboys do what they want in it.” Let offenders pay for supervision.”
According to the DNB, new European regulations (the Micar Directive) offer the prospect of expanding supervision, although the AFM considers the appropriate party to tackle this. In the meantime, the supervision of cryptos remains ‘limited’, in the words of the DNB.
Crypto companies are obliged to pay DNB for this limited supervision: a total of around 2.7 million euros. Patrick van der Meide of the United Bitcoin Companies Netherlands (VBNL) believes that the sector gets little value for this money. ‘You can see that there are still major players on the Dutch market operating without a licence’, says Van der Meide.
The VBNL therefore wants these offenders to pay for supervision in the future. The DNB would have to collect fines that could be used to finance enforcement by the authority.