[2018-04-20] Europe Introduces Customer Verification on Cryptocurrency Exchanges

[nickbelski]

The European Parliament has voted in favor of stricter regulations in the crypto sector. Crypto exchanges and wallet providers will be required to introduce customer due diligence procedures, including identity verification. The platforms will have to apply for registration in order to offer their services. The new measures come with the latest update of the EU Anti-Money Laundering Directive.

Under “Closer Regulation”

Members of the European Parliament supported on Thursday an agreement reached with the European Council in December to bring cryptocurrencies under “closer regulation”. The decision was passed with 574 votes, 13 nays and 60 abstentions, the parliament’s press service announced. The agreement represents the fifth and latest update of the EU Anti-Money Laundering Directive.

The amendments are intended to address “risks linked to virtual currencies”. To end the anonymity associated with them, cryptocurrency trading platforms and custodian wallet providers will be obliged to introduce customer due diligence controls, including identity verification procedures. In the future, these businesses will apply for registration in order to offer regulated exchange and payment services.

The changes also target anonymity provided by payment card issuers. MEPs have approved the reduction of the threshold for identifying holders of prepaid and virtual cards – from the current €250 to €150. This will affect companies offering crypto to fiat conversion as part of non-custodial payment services.

European officials claim they are introducing the measures partly in response to the terrorist attacks of 2015 and 2016 in Paris and Brussels, as well as the Panama Papers leaks. “Criminals use anonymity to launder their illicit proceeds or finance terrorism,” said Krišjānis Kariņš, co-rapporteur on the amendments. In his words, the new legislation will “address the threats to our citizens… by tightening rules regulating virtual currencies and anonymous prepaid cards.”

“We lose billions of euros to money laundering, terrorism financing, and tax evasion – money that should go to fund our hospitals, schools and infrastructure,” his colleague Judith Sargentini added. “We introduce tougher measures, widening the duty of financial entities to undertake customer due diligence. This will shine a light on those who hide behind companies and trusts and should keep our financial systems clean,” she insisted.

See more: https://news.bitcoin.com/europe-introduces-customer-verification-on-cryptocurrency-exchanges/

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[Lucius]

Identify, collect information and taxed them all - it would be a summary of this article,in addition to protecting banks and other financial institutions that are all operate "fair and clean".I'm not against taxation and regulation,but cryptocurrency is used by only 1% of world population or even less,so funny stories about "money laundering, terrorism financing, and tax evasion" in relationship with BTC just shows how big is ignorance of bureaucrats,in this case those who sit in the European Parliament.

We lose millions of euros Mr. Krišjānis Kariņš on your wages and a luxurious life you have in Brussels,pay more attention also to big companies which in all possible ways avoid the payment of taxes and some other bad things which is happening in EU.Cryptocurrency is just the tip of the iceberg...

[Snaic]

This was to be expected. In Europe, there are certain problems with terrorism, so it's no surprise that they practically remove the anonymity of the crypto currency on exchanges and exchangers. Apparently, many countries will follow this example. However, we will still have a lot of decentralized exchanges and exchangers where it will be possible to buy, sell and exchange the crypto currency anonymously, without identifying the individual. I hope that the transactions for the purchase of goods and services for crypto currency, in accordance with the decision of the European Court of 2015, will not be taxed, as Germany did.

[richardsNY]

I have said it many times before already, the current regulations are peanuts compared to what the centralized crypto ecosystem will be going through later on. I can happily say that decentralized exchanges are starting to become more popular by the day, where I am sure that lightning network will play an important role as well. Overall, these regulations might be annoying at first, but as soon as people walked themselves through all this, they will forget about it and focus on what actually matters. In the time that I have been a user of Bitstamp, they opted me to verify myself 2 times, while the first verification was accepted without any problems. It was probably an attempt to grab more information from users and to check if everything is still in order. Why don't they force sites to do this when it comes to gold? I can buy thousands worth of gold and have it be delivered the next day like I bought a new pair of shoes.

[entrepmind23]

Here they go again about “Criminals use anonymity to launder their illicit proceeds or finance terrorism". Using fiat is more anonymous than crypto because in crypto, transactions can be traced while using fiat which has physical existence cannot be easily traced if it is not recorded so the terrorist and people who wanted to do something illegal often use this kind of method.

They just want to use the terrorism part so that they can convince people to remove the anonymity of those people who are behind the transactions. While this will be good to prevent those who are actually using crypto for illegal means, some people would be having a hard time using cryptocurrency even though they want to use it legally because of the verification process in which case they may be lacking supporting documents.

[Qartersa]

So now it is crystal clear that they are only doing so for proper order of things- proper taxation so they could very well support government projects such as education, charitable institutions, infrastructures, among others. I think governments are really open to changes on how the financial system works, even up to the point that they would have to exchange fiat to cryptocurrencies, only that they need to prioritize certain matters such as the collection of taxes due them to be able to sustain the good of the nation. And to be honest, I see nothing wrong with that. Just that the existence of cryptocurrencies in that sense will be a mere redundancy to that of fiat currency.

[gentlemand]

In the time that I have been a user of Bitstamp, they opted me to verify myself 2 times, while the first verification was accepted without any problems. It was probably an attempt to grab more information from users and to check if everything is still in order. Why don't they force sites to do this when it comes to gold? I can buy thousands worth of gold and have it be delivered the next day like I bought a new pair of shoes.

I'll never use Bitstamp again for this reason. You have no idea when you're going to trigger them and you may never have enough documentation to satisfy them.

I can register on a share trading website with nothing other than a passport and proof of address and trade trillions of dollars forever. Why should some anonymous Slovenians require a photo of the interior of my glans a couple of years down the line? Verify me once or fuck off.