Customer Verification On Digital Currency Exchange Now In Europe

The European Legislative body has opted for firmer regulations in virtual currency eco-system. There will be a requirement for customer due diligence procedure among identity verification by Crypto exchanges and wallet providers. In order to provide their services to clients, exchanges will have to provide an application for registration. The newest update of the EU Anti-Money Laundering directive comes with these new measures.

Cryptocurrencies to be brought under “closer regulation”

On Thursday, members of the European Parliament backed the decision by the European Council to bring cryptocurrencies under “closer regulation” in December. The parliament‘s press service declared that the agreement was confirmed with 574 votes, 13 days and 60 abstentions respectively. The decision is representative of the fifth and newest update of the EU Anti- Money Laundering Directive.

In efforts to find solutions to the underlying problem of risk associated with digital currency, the amendment was adopted. Virtual currency trading platforms and custodian wallet providers will be legally instructed to perform a client due to diligence measure which includes identity verification operation, in order to end the anonymity connected with them. In efforts to provide control measures for exchange and payment services, these businesses will apply for registration in the future.

These amendments also tackle anonymity offered by payment card issuer, according to, From the current 250 euro to 150 euro, MEPs have confirmed the decreased of the threshold for identifying holders of prepaid and virtual cards. As a result, firms providing crypto to fiat conversation included in the non-custodial services will be affected.

In response to the terrorist attacks of 2015 and 2016 in Paris and Brussels, as well as the Panama Papers leak, these measures were introduced, claims the European authority. Co-rapporteur on the amendments, Krisjanis Karins noted: “Criminals use anonymity to launder their illicit proceeds or finance terrorism.” He also explained that the new regulation “address the threats to our citizens… by tightening rules regulating virtual currencies and anonymous prepaid cards.”

Judith Sargentini, one of his colleagues also detailed “We lose billions of euros to money laundering, terrorist financing, and tax evasion – money that should go to fund our hospitals, schools, and infrastructure.”

Anti –Money Laundering Directive will enter into force three days after issuance

Subsequent to three days after its publication in the Official Journal of the European Union, the updated Anti-Money Laundering Directive will enter into force. Within 18 months EU member states are expected to transpose the new regulations into their national law. These new rules come to provide a synergy of rules across Europe with regards to digital currencies. Member-states on an individual basis have basically long for a shared ruling or applied their own regulations so far.



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