TL;DR: Bottle Pay. Deribit. Simplecoin. Chopcoin. Those are European-based cryptocurrency businesses publicly capitulating prior to this week’s implementation of AMLD5, the Fifth Anti-Money Laundering Directive published by the European Parliament in the Official Journal of the European Union. Some have closed shop, while others are planning to move a hemisphere away in response.
Crypto Europe Grapples with AMLD5
More than two dozen European Union (EU) member states have formally adopted AMLD5, rules requiring cryptocurrency exchanges and custodial services especially to both register with their respective country’s regulatory agency and conform to know-your-customer (KYC) and anti-money laundering (AML) standards. Failure to do one or the other, much less both, will draw law enforcement scrutiny, the directive appears to imply.
As is usually the case, larger, better-established businesses can weather such burdens, and have historically encouraged such mandates as a way to create competition barriers for smaller startups. That’s always the delicate balance compulsory state regulation must strike, and it’s not clear whether the EU has.
Still other cryptocurrency enthusiasts view AMLD5 as a step toward what is known as regulatory clarity — love or hate them, businesses need government regulations to at least be transparent, understandable, public. It’s much too early for a decisive verdict on AMLD5 on the first two counts, but it is public and was anticipated. How the directive operates in practice is yet another hurdle crypto businesses must navigate in the coming days, weeks, months, and presumably years.
As alluded to earlier, derivatives exchange Deribit plans to leave the Netherlands for the friendlier confines of Panama in Central America, citing AMLD5 specifically. And those businesses that do remain are again saddled with figuring out how each member state interprets the directive: jurisdiction, penalties, assorted other requirements. The time for speculation has ended.
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