Here's a little rant I want to share because I think it illustrates everything that is wrong with today's AML regulations.
I live in the Netherlands and I am an active user of crowdcube.com - a p2p crowd-financing site based in the UK.
Crowdcube stated on their website that international investors were welcome as long as they didn't break any rules in their home country. For 2 years, I was able to invest in various pitches without any problems. Last month, I decided to invest 300 GBP in a UK-based biotech startup. Then, suddendly, they decide to change the rules right in the middle of my investment and send me this email:
Due Diligence and Anti Money Laundering checks
Hello ******,
I’m currently running Anti Money Laundering check reports for the ****** pitch you invested in. I’m afraid that the address that you supplied us with will not suffice and we require a UK residential address in order for us to complete the investment process. The requirements set by GoCardless, our payment provider, also deem that you are required to have a UK residential address with a UK bank account to invest on Crowdcube.
Many thanks,
Jessica ***** | Customer Service Advisor
"Anti Money Laundering"
So sending 300 GBP from the Netherlands to the UK, now automatically makes me suspected drug dealer? Guilty until proven innocent? WTF?
You don't have to be a libertarian to see that there is something seriously wrong with the system here. If an ordinary person living in Amsterdam is prohibited from buying a handful shares in a Cambridge-based biotech startup,
then what the hell is the European Union good for? Apparently the "single market" does not apply to the small guy.
Yes, I realize that this is GoCardless' individual decision, and that this does not constitute a universal cross-border investment ban, but what we are seeing here is a chilling effect of excessively complex and draconian AML regulations. I am sure that there are many other examples of companies simply shutting out foreign investors rather than taking their chances with overzealous regulators.
What makes me really angry is that the damage caused by these regulations is invisible to politicians and voters. The biotech company will never know that they missed out on foreign investors like me. Maybe they will fail, and the politicians will never know that this company could have created life saving treatments, had it been only able to raise more starting capital. The jobless biochemistry graduate will never know that this could have been a great place to work for. And so on... So the regulations will only get worse, and the bad guys will simply route around them through the darknet.
I am sad to be expelled from Crowdcube. It was a great concept. But I can take my money elsewhere. It's not like the UK economy needs it or anything.
