A digital currency savings company based in the Netherlands has announced that it’s shutting down on April 28. Known as Bittr, it blamed the country’s regulators, saying that they have made it impossible for small companies to operate.
Bittr has been allowing its users to purchase BTC on a regular basis from their banks, acting as a savings platform. This service has now come to end, with the founder Ruben Waterman announcing the closure via a blog post. He blamed the upcoming regulatory changes, specifically the Dutch government’s revised interpretation of the 5th Money Laundering Directive (AMLD5).
The AMLD5 came into effect in European countries this year, seeking to stamp out money laundering and concealment of funds. In the Netherlands, it was revised by the Dutch national bank, better known as De Nederlandsche Bank (DNB). The revised regulations were to come into effect in January, but legislators in the country felt that all concerns weren’t adequately addressed. They were finally adopted on April 21. These new regulations require all digital currency operators to conduct stringent KYC, among other requirements.
Waterman has been running Bittr by himself, and as he outlines in the blog post, the regulations require a dedicated compliance officer. This would require him to hire another person, a move the company isn’t big enough to sustain.
The new regulations require digital currency operators to file for registration afresh with the DNB. This process would cost Bittr $5,430 and takes six months, Waterman claimed. Further, he would have to launch the KYC program which would cost him $8,400 for the next six months as he awaits registration.
He has chosen not to go through with the process, he revealed, stating, “However, in that case I would still make Bittr become part of the financial surveillance system to make each and every one go through this KYC procedure and most likely still have to shut down within the next six months, which is why I prefer to not bother you with this process.”
Bittr is the first casualty of the new regulations in the Netherlands, and it’s likely there will be many more. The application process is tedious and costly, with some of the requirements being impossible for small companies in the digital currency industry to attain.
The fate of smaller digital currency platforms is just as bad in many other countries, with regulators making it impossible for them to thrive. In Brazil, new regulations have pushed a number of small exchanges out of business. The latest to call it quits include Acesso Bitcoin and Latoex.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.