Aside from tracking dirty money to offshore paradises, the law brings about a series of restrictive demands on crypto companies in a way never seen before.
Although there is a sizable percentage of investors who staunchly believe anonymity is a central characteristic of cryptocurrency, this new legislation will see digital currencies fall under the watchful eye of the law.
Cryptocurrency-based companies have been under mounting pressure to implement compliance measures when registering new clients.
With the new law in place, authorities within the EU have new powers over legal entities and can obtain information to identify the individuals behind suspicious crypto addresses.
For some companies, the new compliance regulations are the final nail in the coffin.
For United Kingdom-based crypto wallet provider Bottle Pay, the end came on Dec. 13 with the firm directly citing the new law as the reason for its closure.
Other crypto companies seemed to have sensed the changing compliance winds and preemptively ramped up their procedures.
"Many EU crypto businesses are prepared for the challenges of implementation that lie ahead and have taken proactive steps to ensure their companies can secure necessary regulatory approvals and comply on an ongoing basis. Exchanges across the EU are submitting their registration and approval requests to regulators as we speak so that they can operate with official oversight."
"Customers may find additional compliance measures burdensome, especially since the anonymity attached to cryptocurrency is believed to be among the key advantages for many crypto users. At the same time, crypto exchanges and wallet providers become mature financial market players, providing a better experience and, most importantly, safety for customers."
"Those proactive businesses that take an AML-first mindset can expect to thrive and protect their businesses against illicit activity, even if compliance does pose some near-term challenges. However, crypto businesses that are unprepared and have not taken steps to implement appropriate compliance arrangements may find that EU regulators do not give them the approval they need to operate."
New EU AML Compliance Laws Could Disrupt the Crypto Industry
Published on Jan 18, 2020
by Cointele | Published on Coinage
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