Michael on Nostr: Meanwhile on a Dutch news-site nu.nl: **Crypto Gift Cards No Longer Sold Due to Money ...
Meanwhile on a Dutch news-site nu.nl:
**Crypto Gift Cards No Longer Sold Due to Money Laundering Risks After DNB Intervention**
Gift cards that allow users to exchange money for bitcoin or other cryptocurrencies may be used for money laundering. For this reason, the Dutch Central Bank (DNB) has warned ten online retailers about the risks associated with these cards. These retailers have now ceased offering them.
“It works just like a gift card for webshops like bol.com or Amazon,” explains Michel Oerlemans, a supervisor at DNB (De Nederlandsche Bank). “For example, you could give a crypto gift card to friends or family during the holidays. These cards contain funds in euros or dollars, which you can exchange for cryptocurrencies at your convenience, and the funds then appear in your wallet.”
The crypto gift cards are sold by online retailers that also offer various other gift cards, including those for well-known stores or even for use in games. DNB estimates that millions of euros are spent annually on these crypto gift cards through Dutch webshops. However, many sellers operate abroad, where DNB has less oversight.
### Gift Cards with Money Laundering Risks
While crypto gift cards resemble those for popular webshops, the variants for cryptocurrencies carry additional risks. They can be used for money laundering, says Oerlemans.
The cards are not registered to an individual. If a crypto gift card is transferred to another person who then redeems it for cryptocurrency, the origin of the funds becomes untraceable. This creates opportunities for laundering money.
Oerlemans cannot confirm whether this is actually happening. “However, we suspect it is possible. We see the backdoors open,” he notes. If money laundering activities were to be discovered, it would become a matter for the FIOD (Fiscal Information and Investigation Service) and the Public Prosecution Service.
In principle, the sellers of these gift cards are supposed to monitor who their buyers are and where the money comes from. But over the past year, DNB noticed that several sellers offering crypto gift cards through Dutch webshops were not registered with the regulator. As a result, DNB could not verify the reliability of their management or whether they were taking sufficient measures to prevent money laundering.
DNB recently warned approximately ten webshops about their cooperation with unregistered providers. In response, these retailers, who collectively sold crypto gift cards worth several million euros, stopped selling the cards altogether.
### Money Laundering Checks at Banks
The requirement for crypto gift card providers to verify the identity of customers and the origin of funds is similar to the rules applied to banks. Under the Anti-Money Laundering and Counter-Terrorism Financing Act (Wwft), banks are also obligated to prevent money laundering practices.
In recent years, some banks have been fined for inadequate monitoring of potential money laundering activities. Last year, Volksbank (the parent company of SNS and ASN Bank) was fined €4.5 million by DNB. The bank anticipates another fine this year.
Previously, ABN AMRO, ING, and Rabobank were also reprimanded. So far, no fines have been imposed on crypto gift card providers.
Customers with crypto gift cards need not worry about inadvertently participating in money laundering. “The key is that providers of crypto gift cards must start asking their customers where the money comes from. This will deter those seeking to launder money,” Oerlemans concludes.
**Crypto Gift Cards No Longer Sold Due to Money Laundering Risks After DNB Intervention**
Gift cards that allow users to exchange money for bitcoin or other cryptocurrencies may be used for money laundering. For this reason, the Dutch Central Bank (DNB) has warned ten online retailers about the risks associated with these cards. These retailers have now ceased offering them.
“It works just like a gift card for webshops like bol.com or Amazon,” explains Michel Oerlemans, a supervisor at DNB (De Nederlandsche Bank). “For example, you could give a crypto gift card to friends or family during the holidays. These cards contain funds in euros or dollars, which you can exchange for cryptocurrencies at your convenience, and the funds then appear in your wallet.”
The crypto gift cards are sold by online retailers that also offer various other gift cards, including those for well-known stores or even for use in games. DNB estimates that millions of euros are spent annually on these crypto gift cards through Dutch webshops. However, many sellers operate abroad, where DNB has less oversight.
### Gift Cards with Money Laundering Risks
While crypto gift cards resemble those for popular webshops, the variants for cryptocurrencies carry additional risks. They can be used for money laundering, says Oerlemans.
The cards are not registered to an individual. If a crypto gift card is transferred to another person who then redeems it for cryptocurrency, the origin of the funds becomes untraceable. This creates opportunities for laundering money.
Oerlemans cannot confirm whether this is actually happening. “However, we suspect it is possible. We see the backdoors open,” he notes. If money laundering activities were to be discovered, it would become a matter for the FIOD (Fiscal Information and Investigation Service) and the Public Prosecution Service.
In principle, the sellers of these gift cards are supposed to monitor who their buyers are and where the money comes from. But over the past year, DNB noticed that several sellers offering crypto gift cards through Dutch webshops were not registered with the regulator. As a result, DNB could not verify the reliability of their management or whether they were taking sufficient measures to prevent money laundering.
DNB recently warned approximately ten webshops about their cooperation with unregistered providers. In response, these retailers, who collectively sold crypto gift cards worth several million euros, stopped selling the cards altogether.
### Money Laundering Checks at Banks
The requirement for crypto gift card providers to verify the identity of customers and the origin of funds is similar to the rules applied to banks. Under the Anti-Money Laundering and Counter-Terrorism Financing Act (Wwft), banks are also obligated to prevent money laundering practices.
In recent years, some banks have been fined for inadequate monitoring of potential money laundering activities. Last year, Volksbank (the parent company of SNS and ASN Bank) was fined €4.5 million by DNB. The bank anticipates another fine this year.
Previously, ABN AMRO, ING, and Rabobank were also reprimanded. So far, no fines have been imposed on crypto gift card providers.
Customers with crypto gift cards need not worry about inadvertently participating in money laundering. “The key is that providers of crypto gift cards must start asking their customers where the money comes from. This will deter those seeking to launder money,” Oerlemans concludes.