How 5AMLD is affecting crypto service providers – Simon Ana
The European Union has outlined the new anti-money laundering directive that came into effect today, January 10. The law is to bring increased transparancy to financial transactions in cryptocurrency to push back against money laundering and terrorist financing across Europe
According to the EU’s 5AMLD, they’ve stated in their fact sheet that it will
- increase transparency about who really owns legal entities in order to to prevent money laundering and terrorist financing via opaque structures
- give European financial regulators better access to information via centralized bank account registers
- tackle terrorist financing risks linked to anonymous use of virtual currencies and prepaid instruments
- improve the cooperation and exchange of information between anti-money laundering supervisors and with the European Central Bank
- broaden the criteria for assessing high-risk third countries and ensure a high level of safeguards for money moving to or from such countries.
Cryptocurrency providers are struggling to meet the new regulations presented by the EU. There’s been a number of businesses shutting down operation due to the extensive KYC (Know your customer) and AML practices.
A UK crypto-wallet provider, Bottlepay has announced to cease operations at the end of last year due to the fact of this regulation. They stated in one of the companies blog posts that “As a UK custodial Bitcoin wallet provider, the amout and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.”
This regulation in place has now set cryptocurrency companies and users more aware that the European Union is paying close attention to the asset class and have now set its first rules for how companies in this space must behave.
Published at Fri, 10 Jan 2020 21:36:07 +0000
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