The process of crypto adoption is full of challenges due to various reasons such as legal aspects, financial problems, and etc. However, the situation is even more complicated in the case of small crypto exchanges as they have to spend a lot of money to comply with regulations.
Unfortunately, small crypto exchanges are struggling to survive as they can’t afford to hire a compliance officer among other challenges.
Moreover, often it is easier to close the exchange than to comply with regulations. For example, the founder of crypto exchange from the Netherlands decided to close his exchange by April 28. Last week, the sole shareholder of Bittr Ruben Waterman, announced his decision.
Importantly, Bittr does not have the capital to meet the new requirements. Interestingly, the 5th Anti-Money Laundering Directive (AMLD5) went into effect in January of 2020.
According to the information provided by the Dutch National Bank, a company should spend $36,500 only to register. However, this is not the end of the story as there are other costs as well.
Crypto exchanges in the Netherlands
As stated above, Bittr does not have the capital to meet with requirements. Waterman is the sole shareholder as well as the director of this crypto exchange. It means that it was difficult to cope with financial challenges connected with this process.
The first option is to hire a compliance officer, the second one is to keep a lawyer on retainer. Another option is to find a third party, that will manage compliance costs in addition to the government registration fee.
However, given the firm’s small size, it was practically impossible to pay thousands of dollars to register.
There are other issues as well. According to the Bitcoin firms, financial regulators created a de facto licensing regime whereas the AMLD5 only calls for mere registration of cryptocurrency companies.