In a letter released last June 13, the Netherlands Authority for the Financial Markets (AFM) raised doubts as to whether firms dealing in cryptocurrencies conform to licensing laws.
The AFM sent the letter to market participants who are looking to offer cryptocurrency investment opportunities. In their letter, the AFM said that risks associated with cryptocurrencies meant that many such firms would fall short of any licensing obligations.
The letter says that :
“The AFM has serious doubts, partly because of the risks associated with cryptos and their management.”
While investing in cryptocurrency is not subject to regulation under the Netherlands’ Financial Supervision Act, some financial activities may require providers to get a license to operate from the AFM.
The AFM claims that based on the current financial landscape, there was little knowledge of the requirements for many market parties.
Local news outfit Accountancy Van Morgen also quoted the AFM as saying that:
“In combination with the risks associated with cryptos, the AFM has serious doubts whether managers of investment institutions in cryptos can meet the requirements for licensing.”
Just this month, the De Nederlandsche Bank (DNB) joined a growing consensus about blockchain’s current shortcomings, announcing last June 7 that blockchain technology implementations currently available were not yet sufficiently efficient to service the banking sector.
In a report last May, the government said cryptocurrencies’ risk was low.