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European crypto companies could expect higher costs as AMLD5 takes effect

Monday 13 January 2020 10:08 CET | News

January 10, 2019 marked the deadline for the European Union’s 28 member nation-states to adopt the Fifth Anti-Money Laundering Directive or AMLD5.

The new rules require crypto exchanges and custodial service providers to register with their local regulator and demonstrate compliance with know-your-customer (KYC) and anti-money laundering AML procedures. Moreover, the regime gives greater power and reach to financial intelligence units and law enforcement.

These regulations can bring extra costs of compliance, possibly forcing some crypto companies to fold or merge. Already, Deribit, a Netherlands-based crypto derivatives exchange, is planning to relocate to Panama because its home country's version of AMLD5 ‘would put too-high barriers for most traders, both regulatory and cost-wise’, the company said for CoinDesk.

Still, some complexity remains over how AMLD5 will be implemented and operated from one European country to the next. On the plus side, the long-term effect should be greater trust in crypto from financial institutions in Europe. It could make banks more open to providing their services to crypto companies and attract more institutional capital.


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Keywords: AMLD5, KYC, cryptocurrency, crypto exchanges, regulation, money laundering, Europe
Categories: Blockchain & Cryptocurrencies | Cryptocurrencies
Countries: Europe
This article is part of category

Blockchain & Cryptocurrencies