AFM (Authority for Financial Markets) announced it would maintain its tough stance towards the digital assets sector, even as EU rules are loosening.
Dutch authorities maintain tough stance despite looser European union rules
Laura van Geest, the agency’s Chair, stated that while most Western countries are tightening their grip on cryptocurrency, a total ban is unlikely.
Despite the EU’s Markets in Crypto Assets (MiCA) legislation’s less stringent upcoming regulations, the AFM does not believe cryptos are good news and has highlighted their flaws, including their vulnerability to deception, fraud, and manipulation.
According to AFM’s estimates, there are just under 2 million crypto owners in the Netherlands, with the majority investing less than €1,000.
Van Geest also admitted that the county’s link between the crypto world and the traditional financial sector is still limited. Last year, EU institutions and member states agreed on MiCA, which establishes rules for crypto service providers across the EU.
Regulatory approval is required to operate on the common market
To operate in the common market, crypto service providers will need regulatory approval under MiCA. To compete with other countries, the head of the Dutch financial authority insisted that the agency would not reduce its supervision to the lowest level.
The Netherlands is going down this road, even if some companies will try to enter the Dutch market via another European jurisdiction.
Van Geest cautioned about the risks of cryptocurrencies, citing their susceptibility to deception, fraud, and manipulation. She also stated that the value of crypto assets is primarily based on speculation and that their prices can fluctuate significantly. While Van Geest emphasises the risks of cryptocurrencies, Johan Van Overtveldt, Belgium’s former Finance Minister, has urged governments to outright ban them.