AFM releases annex with sector-specific guidance for crypto-asset service providers

The Dutch Authority for the Financial Markets (AFM) has announced the preparation of an annex for crypto-asset service providers (CASPs), supplementing the Guideline on the Wwft and Sanctions Act 1977. This document outlines sector-specific areas of focus.

According to a news release, starting February 4, 2025, CASPs will be legally defined as financial institutions under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft). This classification mandates that CASPs adhere to specific standards aimed at preventing financial crimes. These include implementing internal controls and administrative processes that align with both the Wwft and the Sanctions Act 1977.

In addition to national regulations, CASPs must also comply with the European Transfer of Funds Regulation (TFR), which introduces anti-money laundering and counter-terrorist financing obligations. A significant component of the TFR is the Travel Rule, which requires CASPs to include detailed transaction and sender/recipient information with each crypto-asset transfer. Guidelines from the European Banking Authority clarify how these requirements should be applied in practice.

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To assist CASPs in adhering to these laws, the AFM updated its Wwft and Sanctions Act 1977 guideline in June 2024 and released a specific annex for this sector. The annex outlines expectations and practical steps that CASPs should take to fulfill their legal duties—such as conducting risk assessments, designing internal procedures, monitoring clients, reporting unusual transactions, and ensuring compliance with international sanctions rules.

The AFM has been responsible for overseeing financial markets since March 1, 2002. It supervises various sectors including savings, investment, insurance, loans, pensions, capital markets, asset management, accountancy, and financial reporting. The AFM focuses on promoting fair and transparent markets through inspections, enforcement actions such as fines or warnings, or even withdrawing licenses when necessary.