A leading peer to peer marketplace for crypto sales has announced that it will take an active role in the implementation of a new European law against money laundering.
LocalBitcoins, which is a decentralised currency exchange designed to enable the swapping of Bitcoins into fiat currency, said in a wide-ranging blog post on its website that it would be working to enhance its mission of “combating criminal use” of Bitcoin as the rules come into force.
The new regulation, which is known as the 5th Anti-Money Laundering Directive (or technically labelled as Directive 2018/843), comes from the European Union.
While previous money laundering regulations have been introduced to cover EU member states, this is the first one which covers virtual currency exchanges, as well as wallet companies, in its purview.
As a company based in Finland, LocalBitcoins is obliged to follow the EU law – but pointed out that it had already been working hard to combat money laundering.
“LocalBitcoins as a Finnish company has been a pioneer in advising the regulatory agencies in this process and adapting to the new standards of compliance for the cryptocurrency industry”, it said in a statement.
“It is LocalBitcoins’ mission to bring Bitcoin everywhere and by being a reference in compliance, we also aim to promote trust, legitimacy and maturity in the Bitcoin ecosystem, while paving the way for it to become a more viable and widespread currency and combating criminal use of Bitcoin and its network.
It also announced a series of measures designed to educate its users about the changes – and in a nod to some criticism of allegedly excessive regulation of crypto, the company claimed that the changes would bring benefits to legitimate users too in the form of a more secure trading system.
“We are confident that the new measures will bring significant benefits to our user base, promoting a safer trading environment and acting proactively in preventing fraud”, it said in the statement.
“We are working to make the transition easy to all users who make legitimate use of our services and already comply with LocalBitcoins’ ToS.”
“We will keep you informed through blog and social media updates and will provide more detailed information on the coming changes during March 2019”, it added.
LocalBitcoins also said that it would take specific steps to change the system it currently provides to users, such as improving ID verifying procedures.
“The legal requirements are still being delineated but it is already clear that it will bring major changes into the functioning of virtual currency exchanges.
“The most important changes concerning LocalBitcoins’ users will be related to improving the registration of new accounts and the identity verification processes, introducing wallet withdrawal and trade volume-based verification tiers”, it added.
The 5th Anti-Money Laundering Directive does not have to be adhered to until January of next year.
Finland, however, has taken the step of implementing its features, including the crypto fraud combatting measures, earlier by updating the provisions of its Anti-Money Laundering Act.