Several cryptocurrency companies announced last financial year that they will be unable to continue trading and will be stopping their operations as a result of the EU Fifth Anti-Money Laundering Directive (5AMLD), which is scheduled to come into effect in all EU Member States on 10 January 2020.
The 5th AMLD requires providers of crypto platforms and e-wallets to identify their clients for anti-money laundering purposes. Many are anticipated to conclude operations for their EU subsidiaries, rather than compromising their clients’ confidentiality.
Like crypto payments provider Bottle-Pay Ltd, mining pool Simplecoin and interactive bitcoin platform Chopcoin have announced their respective liquidations in light of the forthcoming restrictions associated with new the 5th AMLD coming into force. Both companies have notified their users that they must withdraw their balances within the coming weeks.
Simplecoin, which operates from the Netherlands, posted a notice on its website stating that users had until December 31st last year to withdraw any remaining balances. On that date, the wallets and the mining service were taken offline, although a basic version of the website has remained provisionally accessible; allowing people to delete their account information.
Although some EU Member States, are expected to transpose the 5th AMLD into national law by the January 10th deadline namely:
However, many others won’t be ready by the deadline. The EC reluctantly released enforcement action against several Member States who were over 1.5 years late to transpose the Fourth Anti-Money Laundering Directive. Some are yet to fully completed it.
The EC gave special mention to the UK who has undertaken to transpose the 5AMLD, even though the Brexit negotiations are rife. It has even published draft legislation and consulted on it; however, the legislative timetable was disrupted by the holding of a general election. The Conservative government has now promised to push the Bill through, along with the Registration of Overseas Entities Bill, which will promote transparency of beneficial ownership of UK property.
The 5th AMLD also introduces centrally determined obligations for performing customer due diligence; stricter identification requirements for pre-paid card purchases; and the end of anonymity and privacy for bank accounts and safe deposit boxes. It also requires all express trusts and their beneficial owners to be registered in central national registers from March 10th 2020.