Coinbase has introduced new know your customer (KYC) requirements for users in the Netherlands. The exchange posted an update saying that the changes will come into effect on June 27.
Specifically, Dutch users will have to provide information about the recipient and transaction if they are sending assets out of the exchange.
The change has been implemented because of pressure to comply with local regulations. The information includes the recipient’s full name, the purpose of the transfer, and the recipient’s residential address.
The crypto community has responded to the news with disappointment, with some saying that it renders Coinbase non-fungible tokens (NFTs) unusable.
It may even be that other governments decide to do the same. If this is the case, then much of the NFT market could experience a huge blow, at least on the centralized side. Governments are bearing down on the DeFi market, and it may not be long before the NFT market is next.
Some governments have taken a harsh stance on NFTs in the past. The Thai Securities and Exchange Commission (SEC) initially banned crypto exchanges from allowing NFT trading, though it has loosened its stance since.
Coinbase goes through rough patch
Coinbase will likely receive a lot more dejected responses from users in the wake of this new compliance measure. The exchange has experienced many such disappointments in recent months.
The COIN price has dropped significantly since its all-time high, and its recent earnings reports have been less than stellar. The recent market crash has also caused it to rescind job offers that it had already sent out, which led to outrage in the crypto community. And one executive warned that more job cuts could be on the horizon.
Credit ratings agency Moody’s has also downgraded Coinbase’s Corporate Family Rating (CFR), a rating assigned to reflect Moody’s opinion of a company’s ability to honor its financial obligations, from Ba2 to Ba3, considered below non-investment grade.
The agency said:
“Coinbase’s substantially weaker revenue and cash flow generation due to the steep declines in crypto asset prices that have occurred in recent months and reduced customer trading activity.”
And its own NFT marketplace got off to a slow start, despite having a long waiting list. Meanwhile, it is also phasing out its Coinbase Pro platform and will instead merge some of those features into the consumer app.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.