Sunday, November 27, 2022

Dutch Finance Minister Proposes ICO Regulation to Protect Consumers From Scams

Dutch Finance Minister Proposes ICO Regulation to Protect Consumers From Scams

Dutch finance minister Wopke Hoekstra has suggested an international stratagem to regulate cryptocurrencies and ICOs. To formulate new consumer protection measures, the minister wants to talk with credit card companies to establish stronger protections for people who buy cryptocurrencies using credit cards.

Also see: First Public Bitcoin Monument to Be Unveiled in Slovenia

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Dutch Crypto Exchanges Have to Register With Government by 2019

According to Hoekstra’s proposals, which he put in a letter to parliament, Dutch crypto exchanges will have to register with the government and comply with know-your-customer (KYC) requirements before the end of 2019.

The proposal comes after the U.S. Securities and Exchange Commission (SEC), demanded cryptocurrency exchanges register their businesses with the agency.

Wopke Hoekstra Dutch finance minister
Wopke Hoekstra

Moreover, to further strengthen consumer protection — Hoekstra’s letter also suggested new laws that protect people dealing with initial coin offerings (ICOs). He said:

“It is being investigated whether investors in ICOs can become just as well-protected as investors with a normal IPO or bond issue. The current framework is not sufficient for this.”

Recently, Austrian finance minister Hartwig Löger contemplated regulating cryptocurrencies based on the existing trading rules for gold. Löger proposed a legal framework for cryptocurrencies throughout Europe.

Earlier this year, French finance minister Bruno Le Maire ordered the country’s central bank to design a new legal framework that aims to regulate digital currency, to restrict its use for tax evasion and illicit activities.

Current Legal Framework ‘Insufficiently Tailored to Cryptocurrencies’

It is not the first time the the Dutch government has come forward to protect the public interest when dealing with cryptocurrencies. In the past, Netherlands Authority for Financial Markets (AFM) stated cryptocurrencies, more particularly ICOs, to be very risky for investors.

At the time, AFM chairman Merel van Vroonhoven stated:

“Although the AFM sees the possibilities of blockchain technology for financial services, it points to the high risks of ICOs in the current hype. The high risk of scams and loss of intake combined with the hype around ICOs at the moment is a dangerous cocktail.”

In his letter to parliament, the Dutch finance minister assured his people would work with fellow European Union member countries in regulating cryptocurrencies, and also explore blockchain technology for cross-border payments.

Additionally, he pointed that the country’s financial law needs to be updated in order regulate digital currencies and business relating the crypto space. “The current supervisory framework and instruments are insufficiently tailored to cryptocurrency,” he noted.

Governments European Union countries have been pushing to regulate cryptocurrencies and ICOs one after the other. Witnessing the present scenario from European governments, pan-E.U. crypto regulation seems imminent.

Should European countries collectively form a legal framework for cryptocurrencies? Let us know your views in the comments section.

Images via Wikipedia

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