The Dutch Central Bank and the Netherlands Authority for the Financial Markets are suggesting that fiat-to-crypto exchanges and solution providers should be labelled as cryptocurrencies carry high financial crime risks, according to a report published this week.\r\n\r\nThe report embraces the concern regarding the use of cryptocurrencies for money laundering practices and terrorism financing through crypto exchange and custody.\r\n\r\n"The AFM and DNB recommend the introduction of a licensing regime under the Wwft, aimed at decisively implementing the requirements imposed by AMLD5," the report says. "Cryptos carry high financial crime risks, to which crypto service providers can be exposed as well as today's financial sector via their indirect exposure to such risks."\r\n\r\nThe paper suggests a licensing regime instead of a regulation system as a financial industry " for fiat-crypto exchange platforms and crypto wallet providers," is needed "to ensure effective implementation of the revised European anti-money laundering directive."\r\n\r\nAccording to both regulatory bodies, cryptos are susceptibles to financial crime due to the "anonymous, cross-border nature of crypto transactions."\r\n\r\n"The AFM and DNB recommend a licensing regime under the Anti Money Laundering and Anti-Terrorist Financing Act because this enables applicants to be assessed, and if necessary rejected, before they enter the market."\r\n\r\n\u201cAmending the definition is also desirable in anticipation of potential European consensus on the qualification of certain cryptos as security under present legislation.\u201d\r\n\r\nDutch financial authorities also call for international coordination to reach consensus on consumer protection on the cryptocurrency industry.