The Dutch crypto market is facing a sharper regulatory squeeze. On February 17, the Netherlands Gambling Authority, or KSA, issued a cease-and-desist order against Polymarket, saying the platform’s prediction markets qualify as unlicensed online gambling under Dutch law. The regulator told Polymarket to stop serving users in the Netherlands immediately and block access from the country. If it fails to comply, the platform could face weekly fines of €420,000, capped at €840,000.
The move has intensified debate across the country’s digital asset community. According to the source material, about 14% of the Dutch adult population, or roughly 2 million people, hold cryptocurrencies in some form. That makes any shift in enforcement or taxation highly visible in the local market.
Polymarket case puts prediction markets in the crosshairs
The KSA action followed an investigation that found more than $32 million had been wagered on outcomes tied to Dutch national elections. The regulator said markets linked to politics, news events, or cryptocurrency prices are treated as gambling, even when they run on blockchain rails.
That distinction is now at the center of the debate. Running on decentralized infrastructure does not exempt a platform from local law, yet critics argue that applying gambling rules to blockchain-based prediction markets raises the barrier for crypto-adjacent products in the Netherlands. The source notes that some analysts see a risk of users shifting to offshore venues or to riskier alternatives if legal access narrows.
Tax reform would include unrealized crypto gains
Pressure on the sector is not limited to prediction markets. Just days before the Polymarket order, the Dutch House of Representatives approved a broad tax reform covering savings and investments, including cryptocurrencies. The proposal, passed on February 12, 2026, would move from taxing assumed returns to taxing actual returns, while also including unrealized gains on crypto holdings.
Under the plan described in the source, annual gains would face a flat tax of about 36%. It would apply to Bitcoin, Ethereum, and other liquid digital assets. If the Senate approves it, the reform is expected to take effect on January 1, 2028. Critics say such a structure could force holders to sell assets in volatile conditions simply to meet tax obligations.
Crypto remains legal under MiCA, but the operating climate is getting tougher
The Netherlands has not banned crypto trading outright. The source states that buying, holding, and selling digital assets remain legal under the EU’s MiCA framework, which has been fully in force since late 2024.
What is changing is the cost and complexity of participating in the market. Reactions inside the crypto community are split. Some argue the country is applying old legal categories to new technology. Others point out that blockchain platforms are global and permissionless by design, making complete enforcement difficult in practice. Based on the facts available, the Dutch approach is not an outright ban on crypto, but it is making the sector more regulated, more expensive, and harder to operate domestically.