The 5th Anti-Money Laundering Directives have kicked-in, and in order to fall in-line with those directives, LocalBitcoins.com has notified its users of new user verification requirements that will be introduced in the coming weeks.
It was not too long ago when new European Union privacy regulations came into force, making almost all major internet companies change their business and data storage practices. Those companies also included cryptocurrency businesses. Now a new set of money laundering regulations have been put in place by European regulators, and cryptocurrency businesses are once again required to change certain business practices. LocalBitcoins has started introducing the necessary changes to make its business practices in-line with the new regulations, and therefore it has announced a new identity verification process today for all its users.
The new regulations proposed by EU are called 5th Anti-Money Laundering Directives (5AMLD). The directives apply to cryptocurrency businesses, and they were enforced by European Union in July 2018. LocalBitcoins is based in Finland, an EU country, and therefore it has also been involved with regulators in devising new regulations for the crypto space. Its official announcement said in this regard:
“LocalBitcoins as a Finnish company has been a pioneer in advising the regulatory agencies in this process and adapting to the new standards of compliance for the cryptocurrency industry. It is LocalBitcoins’ mission to bring Bitcoin everywhere and by being a reference in compliance, we also aim to promote trust, legitimacy and maturity in the Bitcoin ecosystem, while paving the way for it to become a more viable and widespread currency and combating criminal use of Bitcoin and its network.”
Though the company didn’t outline in its announcement exactly what changes it’s going to introduce, (the requirements are still being “delineated”), it said that they’ll bring major changes to the functioning of virtual currency exchanges. It also provided information regarding the areas that will be affected the most by these upcoming changes. It said:
“The most important changes concerning LocalBitcoins’ users will be related to improving the registration of new accounts and the identity verification processes, introducing wallet withdrawal and trade volume-based verification tiers.”
Now, it doesn’t mean that the existing users will also have to go through a cumbersome process after the introduction of these new changes. The company added to its announcement that “it is working to smoothen the transition for those customers who make legitimate use of its platform.” Let’s see how it achieves that!