The finance ministry has turned down several requests from the Dutch financial sector watchdog AFM for additional funding to monitor the crypto currency sector, the Financieele Dagblad reported on Monday.
In addition, the ministry has placed limits on the contributions that the AFM can ask from the sector itself, the paper said, quoting government documents obtained using freedom of information legislation.
The AFM says it needs additional funding to meet new responsibilities which derive from EU legislation on the crypto currency sector. But the ministry says a government contribution would be “politically unachievable” and wants instead a minimum level of regulation, which the AFM says is insufficient to allow it to do an effective job.
The documents, almost 300 pages in total, show that the finance ministry is not as concerned about fraud involving crypto as the AFM. “Given the risks in the crypto sector… we advice going for the minimum scenario”, the paper quotes one document as saying.
Experts and the Trimbos addiction centre are surprised by the ministry’s reluctance, telling the paper this will result in “sub-optimal supervision”.
The EU legislation, known as MiCa, comes into effect at the end of this year.
The AFM told the paper it will focuses “on those issues where the most harm to consumers, investors and market participants exists or may arise,” and declined to comment on the finance ministry’s stance.
A spokesman for ministry said that the required capacity was determined and allocated in close consultation with the regulators and said there will be a review next year.
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