Providers of crypto asset services
As provider of crypto asset services, you are obliged to report unusual transactions to FIU-the Netherlands. This is provided for in the Money Laundering and Terrorist Financing (Prevention) Act (Wwft). You are required to report both completed transactions and transactions that have not yet been completed (intended transactions). This way you contribute to the fight against money laundering, predicate offences and terrorist financing.
‘’crypto-asset service provider means a legal person or other undertaking whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services in accordance with Article 59’’
What services are included in the provision of crypto asset services is described in the same regulation (in Article 3(1)(16)):
‘crypto-asset service’ means any of the following services and activities relating to any crypto-asset:
(a) providing custody and administration of crypto-assets on behalf of clients;
(b) operation of a trading platform for crypto-assets;
(c) exchange of crypto-assets for funds;
(d) exchange of crypto-assets for other crypto-assets;
(e) execution of orders for crypto-assets on behalf of clients;
(f) placing of crypto-assets;
(g) reception and transmission of orders for crypto-assets on behalf of clients;
(h) providing advice on crypto-assets;
(i) providing portfolio management on crypto-assets;
(j) providing transfer services for crypto-assets on behalf of clients;
When do I report a transaction?
You are required by law to be alert to the transactions and actions of your customers, and to report unusual transactions. As provider of crypto asset services you know what is usual in your industry. You are therefore best positioned to assess whether a transaction is unusual and may be related to money laundering, predicate offences or terrorist financing. That underlines the importance of your professional judgment.
There are transactions that you should always report, regardless of the circumstances. These are transactions that meet the objective indicators. An overview of all the indicators that help you to assess transactions is given below. In addition, the general guidelines of the Ministry of Finance and the Ministry of Justice and Security and the Q&As and Good Practices Wwft of De Nederlandsche Bank (DNB) provide pointers on complying with the law. DNB is your supervisor and monitors your compliance with your obligations under the Wwft.
What indicators help me to assess transactions?
There are 3 indicators that may apply to providers of exchange services between virtual currencies and fiat currencies. They will help you determine whether you should file a report with FIU-the Netherlands. You must always report transactions that meet the objective indicator. For the subjective indicator, it is particularly important that you assess whether a transaction is unusual.
The literal description of the indicators in the Wwft Implementing Decree is given below. Use the codes in front of the indicators when reporting an unusual transaction. If your report is based on a subjective indicator, it is important to include a detailed description of the transaction and explain why you suspect money laundering or terrorist financing.
Objective01 – "It stands to reason that transactions reported to the police or Public Prosecution Service in connection with money laundering or terrorist financing should also be reported to the Financial Intelligence Unit; after all, there is a presumption that these transactions may be related to money laundering or terrorist financing."
Specifically and only for providers of exchange services for exchanging crypto-assets for cash (as referred to in Article 3(1)(16)(c) of the aforementioned regulation), in addition to Subjective01 and Objective01, an additional indicator applies:
Objective14 - "A transaction of an amount of €10,000 or more involving an exchange between virtual currency and cash fiat currency."
Do you believe that a completed or intended transaction meets one or more of these indicators? If so, you are legally obliged to report it to us. Reports based on the subjective indicator may, for example, concern customers who refuse to identify themselves.
Of course, there are many more types of unusual situations. More information on this is given in the practical examples for providers of crypto asset services. The examples will give you an idea of what to consider. They help you to better recognize unusual transactions and decide whether you should file a report.
What happens to an unusual transaction?
An institution that has reported an unusual transaction receives an automatic message, i.e. an acknowledgement of receipt. This is important in connection with indemnification. We will investigate this unusual transaction. If we declare the transaction suspicious after investigating it, it is made available to investigative, intelligence and security services. They conduct a further investigation based on their own priorities.