Bitstamp has introduced new rules that affect how its Dutch traders withdraw digital wallets to external wallets.
According to a notice shared on Twitter, the Luxembourg-based exchange informed its clients that they won’t be able to withdraw their digital assets to self-hosted wallets without providing proof that they own the wallet address in question.
The exchange claims that it made the withdrawal changes “due to the new regulation regarding cryptocurrencies introduced by the Dutch government.”
“The new regulation requires us to collect proof that you are the owner of any third-party wallet or exchange account before you can withdraw crypto to it,” reads the letter.
Traders are required to add photographic evidence to a whitelist before they can make withdrawals.
The whitelisting feature already existed on the exchange before but the only difference is that it has become obligatory for all customers that have to adhere to the new Dutch regulations.
Users can no longer withdraw directly to third-parties but have to send their assets to personal wallets first.
“This also means that withdrawals from your Bitstamp account directly to third-parties are no longer allowed. You have to withdraw crypto from Bitstamp to your own wallet first if you want to send it to any third-parties.”
Dutch crypto regulation
Bitstamp made the new changes in line with new anti-money laundering regulations drafted in the Western European country in November 2019 and passed into law a year later.
The new rules require cryptocurrency service providers to determine if their clients or beneficiary owners are on a Dutch or European sanctions list before rendering services, and should monitor all “incoming and outgoing payment transfers.
In November, Bitcoin, a Dutch cryptocurrency exchange told its users that they needed to adhere to the new verification rules. The exchange did not hold back its frustration at the new policy and called it a “nuisance.”
The U.S. Treasury proposed similar rules
The U.S. Treasury Department, through the Financial Crimes Enforcement Network (FinCEN), proposed new rules requiring crypto service providers such as exchanges, banks, and money service providers (MSBs) to identify individuals who engage in certain transactions.
Coinbase CEO, who first addressed the new rule change before the Treasury Department made a formal announcement, said he was concerned that the new rule “would have unintended side effects.”
When the proposed rule was announced, the crypto community was infuriated by the fact that it was only given two weeks to comment on the matter.