Are investment services relating to cryptocurrencies subject to supervision in the Netherlands?

We are observing a growing interest in activities related to cryptocurrencies like Bitcoin. Although their names seem to suggest otherwise, these products are not currencies in the sense of legal tender, i.e. they are not money. Neither are they financial products, meaning that buying and selling of cryptocurrencies (or brokerage of these services), or providing services relating to custody or management of balances in cryptocurrencies are not subject to regulation under the Financial Supervision Act.

Such activities may nevertheless bring their providers within the scope of the Financial Supervision Act, for instance if the person buying or selling or taking into custody or managing cryptocurrencies invites from the general public (other than professional market operators) deposits or other repayable funds. This may also happen if customers are enabled to convert into cash their cryptocurrency holdings with cryptocurrency service providers. Article 3:5 of the Financial Supervision Act, however, prohibits anyone in the Netherlands who is not a bank from inviting from the public, acquiring or holding repayable funds in the pursuit of business.

The Financial Supervision Act also applies if an institution wants to offer units in investment institutions that invest in cryptocurrencies. Under Article 2:65 of the Financial Supervision Act, it is prohibited to manage a Dutch investment institution, or offer investment units in a Dutch investment institution without the manager holding the necessary licence issued by the AFM, or if it concerns an investment institution that has no separate manager, without the investment institution holding the necessary licence issued by the AFM.

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