Dutch Ministers are presenting an outdated argument that digital currencies could be utilized for money laundering purposes. Bestmixer was recently shut down because of implications that it was combining illegal forms of cryptocurrency with “honest coins,” hence washing the dirty money clean in what appears to be a classic money laundering example.
Following that news, the Netherlands seems to be concerned that similar cases will happen. Legislators have already sent a letter to the nation’s parliament asking for permission to regulate and monitor digital currencies as a means of addressing and preventing money laundering within the country before it becomes a more significant issue.
The five-page letter indicates that regulators wish to become the leaders in Europe regarding monitoring digital currency and ensuring it is utilized properly and safely.
“Crime cannot pay. Not in the Netherlands, not in Europe, and not globally. This makes it possible for criminals to stay out of the reach of the government and to enjoy those proceeds undisturbed. These illegal proceeds can also be used to finance the same or new criminal activities… Criminals who use the financial system to disguise their criminal proceeds seriously compromise the integrity and security of the financial system. Money laundering is an immense and complex problem and it is therefore very important that we combat money laundering in a joint and effective way,” the document reads.
It also outlines different ways of monitoring cryptocurrency, one of which involves examining every exchange and wallet holder in the nation. Regulators are also looking to limit ICOs, which have a tarnished reputation since they first emerged as popular fundraising methods a couple of years ago.
ICOs are popular among startups aiming to raise capital for their operations. They often work when a firm provides investors access to a new digital coin in exchange for money. The coin will give holders access to the firm’s products and services.
Unfortunately, a lot of these firms disappear within months of conducting their ICOs, often due to being phony or fraudulent, or because the funds they raised are insufficient to finance the business. Investors usually end up stuck with a coin they cannot use.