The Dutch finance ministry rejects the Authority for Financial Markets’ request for additional funding to enhance cryptocurrency oversight amid new European regulations, highlighting a regulatory clash.
The Dutch finance ministry has refused multiple requests for additional funding from the Authority for the Financial Markets (AFM) to bolster its oversight of the burgeoning cryptocurrency sector. This decision comes as new European regulations, known as MiCa, take effect, increasing the regulatory responsibilities of financial watchdogs across the continent.
A Clash of Priorities
The AFM, which is responsible for regulating financial markets in the Netherlands, has argued that the new European cryptocurrency legislation necessitates increased funding to ensure effective supervision. However, the Dutch finance ministry has labeled the request for additional funds as “politically unachievable,” opting instead for a minimal regulatory approach. This stance has sparked concerns within the AFM, which views the current funding levels as insufficient for managing the increased workload imposed by the MiCa regulations.
Reports indicate that the finance ministry is less concerned about potential crypto-related fraud, highlighting a significant divergence in priorities between the two regulatory bodies. While the AFM has committed to focusing on areas that pose the greatest risks to consumers and investors, it has yet to outline specific plans for future oversight of the crypto market.
Regulatory Caution in the Netherlands
The Netherlands has historically taken a cautious approach to cryptocurrency regulation. The country has issued fines to several large crypto exchanges for failing to comply with local registration requirements and anti-money laundering rules. This cautious stance reflects the broader European approach to cryptocurrency, which aims to balance innovation with consumer protection and financial stability.
One Trading Secures OTF License
Amid these regulatory developments, One Trading, a crypto trading platform incubated by Bitpanda, has obtained an Organized Trading Facility (OTF) license from the Dutch Financial Markets Authority. This license allows One Trading to bring crypto futures trading onshore within the European Union, positioning it as the first cash-settled perpetuals platform in Europe, including the UK.
Joshua Barraclough, the founder of One Trading, stated that the license aligns with the company’s mission to enable all customer types “to go long or short on any asset, use any asset as collateral, settle everything instantly, and perpetually roll contracts.” The platform emerged as an independent entity from Bitpanda Pro, a unit of the Austrian exchange catering to institutional crypto traders. In 2023, One Trading raised €30 million in a Series A funding round led by Peter Thiel’s Valar Ventures, with participation from MiddleGame Ventures, Speedinvest, Keyrock, and Wintermute Ventures.
BlackRock Warns of Investment Scams
In related news, asset management giant BlackRock has issued a warning to its users about a surge in investment scams targeting its customers for its spot Bitcoin and Ether exchange-traded funds product. In a July 29 post on social media platform X, BlackRock advised users to be wary of scammers using the company’s brand name to lure investors into dubious “training or investments.”
The company emphasized that its executives do not contact anyone via social media platforms like WhatsApp and Telegram. “Please remain vigilant, and if you suspect fraudulent activity, do not proceed,” the post read. According to a blog on BlackRock’s website, scammers often use the actual names of the firm’s employees, alongside fake email addresses and phishing websites, to deceive users. Victims are typically contacted on social media platforms and enticed with lucrative offers, eventually being socially engineered to divulge confidential information.
BlackRock highlighted that these schemes often involve payment requests via third-party channels not connected to the firm, stating, “BlackRock would never request such payments.” The company also warned of manipulated domain names, such as “blackrockk.com,” which are designed to mislead victims into visiting malicious websites.
Moving Forward
As the cryptocurrency industry continues to evolve, the clash between regulatory bodies and the need for robust oversight remains a critical issue. The Dutch finance ministry’s decision to reject the AFM’s funding request underscores the ongoing challenges in balancing effective regulation with political and financial realities. Meanwhile, the actions of companies like One Trading and warnings from firms like BlackRock highlight the dynamic and often precarious nature of the crypto market.