A business that accepts, holds or pays in crypto-assets takes on obligations that have little to do with the technology. Three run through almost every case: anti-money-laundering duties where the activity brings the business within the scope of the Wwft, sanctions screening of counterparties and wallet addresses, and accurate accounting and disclosure of holdings whose value moves sharply. Our article on cryptocurrency regulation and MiCA deals with the licensing regime; this one deals with the compliance risks that arise even where no licence is required.

Why does cryptocurrency attract money-laundering scrutiny?

Cryptocurrencies such as Bitcoin, Ethereum and Litecoin run on blockchain technology: a shared, decentralised ledger that is not controlled by any single party and that records every transaction. That structure also gives users a degree of anonymity, because a wallet address does not by itself reveal who is behind it. For a business, that combination is the risk: if you cannot show where crypto-assets you receive actually came from, you can be drawn into a criminal investigation even if you did nothing wrong yourself.

What does Dutch law say about money laundering?

Money laundering is a criminal offence under the Dutch Criminal Code (Wetboek van Strafrecht). Article 420bis punishes concealing or transferring the true nature, origin or holder of an asset while knowing it derives from crime; article 420ter increases the maximum sentence where money laundering is a habitual activity (“gewoontewitwassen”); article 420quater covers “schuldwitwassen”: a lower, negligence-based offence for someone who should reasonably have suspected the criminal origin of an asset, even without actual knowledge. All three carry a custodial sentence and a fine, with the maximum sentence rising with the degree of intent and habituality. Because these maxima and fine categories are periodically adjusted, we do not quote exact figures here; ask us for the current thresholds if they matter to your situation.

How have Dutch courts applied this to bitcoin?

Dutch courts have repeatedly linked bitcoin transactions to money laundering where the origin of the coins could not be explained:

In one case, a person received money obtained by converting bitcoins into euros. The bitcoins had been obtained through the dark web, which the court found is used almost exclusively for trading in illegal goods paid for in bitcoin. Because the origin of the fiat money was never investigated, the court held that the suspect had knowingly accepted the significant risk that the money derived from crime, and he was convicted of money laundering (Dutch Criminal Code, article 420bis).
In a second case arising from a Fiscal Information and Investigation Service (FIOD) inquiry into bitcoin traders, the suspect converted bitcoins deposited in an online wallet, again traced back to the dark web, into fiat money. He refused to explain the origin of the coins and dealt with traders who guaranteed client anonymity for a high commission. The court inferred intent from those circumstances and convicted him of money laundering.
In a third case, a bank ended its relationship with a client after the client used cash to buy bitcoins for third parties. The bank could not verify the origin of the cash and, unable to meet its own customer due diligence obligations, terminated the account. The court accepted that the bank was entitled to do so because the client had not shown the cash had a lawful origin.

These are the kind of facts that come up repeatedly: dark-web origin, unexplained cash, and counterparties who will not disclose where funds come from.

Is cryptocurrency now regulated in the EU?

It is more regulated than when this article was first written. The EU’s Markets in Crypto-Assets Regulation (MiCA) now sets licensing and conduct rules for crypto-asset service providers across the Union, and the Wwft brings crypto exchanges and custodian wallet providers established in the Netherlands within Dutch anti-money-laundering supervision by De Nederlandsche Bank (DNB). Regulation has not removed the criminal-law risk described above: MiCA governs who may offer crypto services and how, while the Criminal Code and the Wwft govern what happens when the money itself looks dirty.

What accounting and disclosure duties come with holding crypto-assets?

Crypto-assets on a company’s balance sheet raise questions beyond money laundering. Their value can move sharply within a single reporting period, so annual accounts need to reflect that volatility consistently and the valuation method needs to be explained, not just the closing figure. Where crypto-assets are held on behalf of clients or third parties, keep client assets clearly separated from the company’s own holdings in the administration: mixing them makes it far harder, in an investigation or a dispute, to show which assets belong to whom. None of this replaces professional accounting advice, but it is the kind of paperwork a regulator or a liquidator will ask for first if something goes wrong.

An illustrative example: a trading company accepts payment in crypto-assets from an overseas counterparty it has not dealt with before, converts the coins to euros through an exchange the same day, and books the proceeds as ordinary sales income. No one records which wallet the coins came from or why the counterparty paid in crypto rather than by bank transfer. If that counterparty later turns out to be linked to crime, the company has no paper trail to show it acted in good faith, and it is the company’s bank, not the counterparty, that first asks the difficult questions.

What can a business dealing with crypto-assets do?

In practice, this comes down to being able to answer a regulator’s or a bank’s questions before they are asked:

Keep a record of where crypto-assets you receive come from, and be able to show it.
Screen counterparties and wallet addresses against sanctions lists before a transaction, not after.
If the Wwft applies to your activity, put customer due diligence and transaction monitoring in place, and register with DNB where required.
Treat a counterparty’s refusal to explain the origin of funds, or use of services that promise anonymity for a fee, as a warning sign rather than a convenience.
Take a bank’s or payment provider’s compliance questions seriously: refusing to answer them is itself a common thread in the case law above.
Separate client crypto-assets from company assets in your administration, and document the valuation method you use when the value moves sharply between reporting dates.
Put the above in writing as an internal policy, even a short one, so that staff who deal directly with counterparties know when to escalate rather than simply process a transaction.

None of this is a guarantee against an investigation. What it does is give you, your bank and, if it comes to that, a court something to point to that shows you took the origin of the crypto-assets seriously rather than looking away from an obvious warning sign.

In summary

Dealing in crypto-assets can expose a business to money-laundering risk under articles 420bis, 420ter and 420quater of the Dutch Criminal Code, even without any intent to commit an offence.
Dutch courts have convicted people of money laundering where crypto-assets could be traced to the dark web and the origin of the resulting money was not explained.
MiCA now regulates who may provide crypto-asset services in the EU; the Wwft separately requires Dutch crypto businesses to carry out customer due diligence and monitoring.
Being able to document the origin of crypto-assets you receive, and screening counterparties, is the main practical safeguard.
A written internal policy, even a short one, helps staff recognise a warning sign and escalate it instead of simply processing the transaction.

Frequently asked questions

Is it illegal to trade in cryptocurrency in the Netherlands? No. Trading itself is lawful, but a business that handles crypto-assets professionally may fall under the Wwft, and anyone who deals with crypto-assets of unclear origin risks a money-laundering investigation.

What is the difference between money laundering and “schuldwitwassen”? Ordinary money laundering under article 420bis requires knowledge that the asset derives from crime. “Schuldwitwassen” under article 420quater applies where you did not know but reasonably should have suspected it, and carries a lower maximum sentence.

Does the Wwft apply to every business that ever touches cryptocurrency? No. It targets businesses that provide crypto services professionally, such as exchanges and custodian wallet providers established in the Netherlands. A company that occasionally accepts crypto as payment for its own goods or services is not automatically a Wwft-obliged entity, but it can still be drawn into a money-laundering investigation if it cannot explain where the crypto-assets came from.

What should I do if a bank or payment provider starts asking questions about crypto-assets I received? Answer them, and answer them with documentation. A bank that ends a relationship over unexplained crypto income is, on the case law above, generally entitled to do so, and refusing to cooperate tends to make a business look more suspicious, not less.

Sources

ECLI:NL:RBMNE:2017:5716; ECLI:NL:RBROT:2017:8992; ECLI:NL:RBAMS:2017:8376 (Dutch courts, rechtspraak.nl). Autoriteit Financiële Markten, public statements on the risks of trading in cryptocurrencies and on the duty of care owed by firms offering bitcoin futures to retail investors, afm.nl. International Monetary Fund, “Fintech and Financial Services: Initial Considerations” (2017).

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