Topic: [2019-12-18] Two more bitcoin firms shutdown over impending EU money-laundering (Read 434 times)
December 30, 2019, 09:14:59 PM
AML is the foremost reason for KYC. And this is enforced by the government without compromise. It effectively kills the anonymous factor of exchanges. I hope there is still a BTC or two minimum for unverified accounts. This is the EU saying you need to bend or you face the risk of breaking.
December 27, 2019, 05:07:36 PM
I'm talking about huge exchanges like BitMEX and Poloniex, not casinos and darknet markets. I don't believe we've ever seen exchanges -- who generally have some AML policy in place -- restricted in that way.
Binance has frozen some coins sent from Wex, other than that I wouldn't be surprised if some exchanges, say, Bitstamp viewed a user who would send coins from Binance with more suspicion, they just wouldn't necessarily tell anyone about it.
That Binance/Wex situation was different. Customers were alleging that coins deposited to Binance (from Wex's cold wallets) were stolen from them, so Binance temporarily froze the associated accounts and asked for those customers to file police reports. They have a whole policy for dealing with these types of allegations.
The situation I'm concerned about is more like Binance freezing/investigating all accounts receiving any deposits from Wex -- or BitMEX, Poloniex, etc.
December 27, 2019, 04:56:07 PM
I'm talking about huge exchanges like BitMEX and Poloniex, not casinos and darknet markets. I don't believe we've ever seen exchanges -- who generally have some AML policy in place -- restricted in that way.
Binance has frozen some coins sent from Wex, other than that I wouldn't be surprised if some exchanges, say, Bitstamp viewed a user who would send coins from Binance with more suspicion, they just wouldn't necessarily tell anyone about it.
December 27, 2019, 04:36:24 PM
My primary concern with platforms registering in the Seychelles and similar jurisdictions so they can continue avoiding AML/KYC is that the industry is creating a two-tiered system. Is it possible that the whitelisted exchanges -- the Coinbases, Geminis, and Bitstamps -- will begin restricting deposits from non-compliant platforms? That creates huge fungibility issues.
Already has been the case for quite a while now, coins from mixers, coinjoin, wasabi, gambling sites or a dnm can trigger an account freeze.
I'm talking about huge exchanges like BitMEX and Poloniex, not casinos and darknet markets. I don't believe we've ever seen exchanges -- who generally have some AML policy in place -- restricted in that way.
December 27, 2019, 04:06:43 PM
My primary concern with platforms registering in the Seychelles and similar jurisdictions so they can continue avoiding AML/KYC is that the industry is creating a two-tiered system. Is it possible that the whitelisted exchanges -- the Coinbases, Geminis, and Bitstamps -- will begin restricting deposits from non-compliant platforms? That creates huge fungibility issues.
Already has been the case for quite a while now, coins from mixers, coinjoin, wasabi, gambling sites or a dnm can trigger an account freeze.
However, there are some minimum amounts that will be allowed under the new directive (50-150 EUR), so you may still be able to trade small amounts without KYC.
As long as transaction fees are low, that is, or even that will stop making sense.
December 26, 2019, 07:24:00 PM
On one hand this is stupid because if they aren't allowing people to exchange coins to fiat money they shouldn't undergo AML regulations because no laundering can take place.
Laundering just means disguising the source of illicit proceeds. Swapping them for different currencies without revealing your identity seems like a fine way to do that.
That is if you consider cryptocurrencies to be money. If I get wow gold by hacking someone's account and not disclose what I did is it going to be money laundering? I'd say no because wow gold is not money. And it's no different from some shitcoin because you can sell wow gold and swap it into fiat if you really want. Maybe when you do that it becomes money laundering. To me it's all semantics.
The US gov would like to first make the law ambiguous enough so it can be interpreted in at least 10 different ways and then charge people for breaking it.
December 25, 2019, 10:37:51 AM
Welcome to the financial world. The most (over) regulated sector across the planet.
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
i assume you're referring to the privacy features of the lightning network, or maybe the future integration of schnorr signatures?
bitcoin and BSV are both getting regulated to hell regardless of these privacy features, so i'm not sure what point you're trying to make. regulations like the 5th AML directive capture all cryptocurrencies under the same umbrella. BSV exchanges and custodial wallets are screwed just the same as everyone else.
There is a real diff in terms of purpose and governance / roadmap and compliance help on due dilligence tasks. Keep it easy simple stupid.
KISS
That makes a huge difference where I see only one solution winning that race.
https://thecurrencyanalytics.com/8898/bitcoin-sv-shows-potential-to-restore-the-original-version-of-bitcoin-sydney-ifergan/
December 25, 2019, 09:39:14 AM
crypto firms who want to obey regulations will sooner or later have to meet such fate. with rise in popularity of bitcoin we will see more such strict regulations coming into place. regulations and crypto are two enemies. lets see who wins
Quote
A notice on the Simplecoin website reads that it is closing down on Jan. 1 because the new rules will require the firm to implement several anti-money laundering (AML) know-your-customer (KYC) requirements and it is against those to protect users' privacy.
https://www.theblockcrypto.com/post/50613/two-more-crypto-firms-shutting-down-over-impending-eu-money-laundering-rules
https://www.theblockcrypto.com/post/50613/two-more-crypto-firms-shutting-down-over-impending-eu-money-laundering-rules
December 24, 2019, 11:20:03 PM
@figmentofmyass. I think that hv_ might be drunk on a christmas party hehehe. I am shaking my head while reading his reply to me 5 times.
December 24, 2019, 02:18:40 PM
Welcome to the financial world. The most (over) regulated sector across the planet.
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
i assume you're referring to the privacy features of the lightning network, or maybe the future integration of schnorr signatures?
bitcoin and BSV are both getting regulated to hell regardless of these privacy features, so i'm not sure what point you're trying to make. regulations like the 5th AML directive capture all cryptocurrencies under the same umbrella. BSV exchanges and custodial wallets are screwed just the same as everyone else.
December 24, 2019, 04:05:16 AM
Welcome to the financial world. The most (over) regulated sector across the planet.
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
What does it mean to scale the original transparent bitcoin industrial way? How would it make bitcoin avoid the regulations?
Not avoid but stay seamless and compliant.
You know what 'purpose' means in legal terms?
Dont fuck up open financial relevant protocols.
December 23, 2019, 09:27:10 PM
Welcome to the financial world. The most (over) regulated sector across the planet.
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
What does it mean to scale the original transparent bitcoin industrial way? How would it make bitcoin avoid the regulations?
December 23, 2019, 03:15:56 PM
I think there can be no exceptions, the laws will apply to anyone doing business in the European Union. There are three options, adjusting to new laws, terminating your business, or moving to another country. Although running away from the law only delays the inevitable, as there are fewer and fewer locations to work in the financial sector without KYC.
My primary concern with platforms registering in the Seychelles and similar jurisdictions so they can continue avoiding AML/KYC is that the industry is creating a two-tiered system. Is it possible that the whitelisted exchanges -- the Coinbases, Geminis, and Bitstamps -- will begin restricting deposits from non-compliant platforms? That creates huge fungibility issues.
On one hand this is stupid because if they aren't allowing people to exchange coins to fiat money they shouldn't undergo AML regulations because no laundering can take place.
Laundering just means disguising the source of illicit proceeds. Swapping them for different currencies without revealing your identity seems like a fine way to do that.
December 23, 2019, 11:06:26 AM
Welcome to the financial world. The most (over) regulated sector across the planet.
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
Scale the original transparent Bitcoin industrial way or get regulated into nowhere
Told ya
December 23, 2019, 08:58:59 AM
On one hand this is stupid because if they aren't allowing people to exchange coins to fiat money they shouldn't undergo AML regulations because no laundering can take place.
On the other, since they are required to do KYC anyway, they could add an exchange options to their services. Now they can offer cloud mining, pool mining, and so on, with an option to exchange mined coins to fiat on site, making it faster and easier for their customers. It's important to find silver lining and adapt.
On the other, since they are required to do KYC anyway, they could add an exchange options to their services. Now they can offer cloud mining, pool mining, and so on, with an option to exchange mined coins to fiat on site, making it faster and easier for their customers. It's important to find silver lining and adapt.
December 23, 2019, 06:35:15 AM
Any company serving EU residents will need to implement KYC now?
If that's the case, I'm surprised we haven't heard more from exchanges. I hope we don't see a rash of hastily added KYC policies next month.
If that's the case, I'm surprised we haven't heard more from exchanges. I hope we don't see a rash of hastily added KYC policies next month.
I think there can be no exceptions, the laws will apply to anyone doing business in the European Union. There are three options, adjusting to new laws, terminating your business, or moving to another country. Although running away from the law only delays the inevitable, as there are fewer and fewer locations to work in the financial sector without KYC.
Binance already has a branch that operates under the mandatory KYC (https://www.binance.je/en), so it is very possible that they will simply introduce KYC to Binance Europe, and give some time to everyone to do it or withdraw their funds. However, there are some minimum amounts that will be allowed under the new directive (50-150 EUR), so you may still be able to trade small amounts without KYC.
December 22, 2019, 09:09:37 PM
I haven't heard any of the major exchanges, or anywhere really, mention this. Presumably that means they've taken it in their stride? If it's that onerous and that soon I expect to have heard a great deal more about it than I have.
They might be taking it in stride not to hesitate in giving their users' private data to anyone that demands it under law hehe.
December 22, 2019, 03:21:01 PM
Malta is a full member of the European Union and I don't see how it could stay out of reach of AMLD5. If they want to do business within the EU, they will need to adjust to a new directive.
There have been rumors floating around since the beginning of the year that Binance might be planning to leave Malta. It sounds like it's not just a question of leaving Malta, though. Any company serving EU residents will need to implement KYC now?
If that's the case, I'm surprised we haven't heard more from exchanges. I hope we don't see a rash of hastily added KYC policies next month.
December 21, 2019, 09:24:30 AM
does this apply only to EU-based operations? or also to offshore companies that serve EU customers?
i've seen surprisingly little discussion about the exact consequences this will have for the industry. i've just seen that a few EU-based companies are shutting down and deribit (the netherlands) are implementing KYC. i'm hoping exchanges like binance, bitmex, kucoin, etc will hold the line and stay KYC-free. binance is based in malta so i'm wondering if they'll jump jurisdictions soon as they have so many times before.
I cannot say with certainty how this will affect companies like Binance, but Malta is a full member of the European Union and I don't see how it could stay out of reach of AMLD5. If they want to do business within the EU, they will need to adjust to a new directive. It's not just AMLD5, but also AMLD6 directive which brings 5 more amendments and has yet to enter the approval process of EU member states.i've seen surprisingly little discussion about the exact consequences this will have for the industry. i've just seen that a few EU-based companies are shutting down and deribit (the netherlands) are implementing KYC. i'm hoping exchanges like binance, bitmex, kucoin, etc will hold the line and stay KYC-free. binance is based in malta so i'm wondering if they'll jump jurisdictions soon as they have so many times before.
European lawmakers seem to have decided to deal with every form of anonymity in the financial business, which is likely to cause some companies to change their place of business.
December 20, 2019, 03:59:58 PM
I'm sure that if they continue to be so annoying we will see a trend of an exodus of companies that will prefer to go elsewhere, where they will not be so annoyed. And it's quite understandable from a business point of view
Problem is, sooner or later other countries will start getting pressured to adopt these new regulations, too, both overtly and covertly (if it hasn't already started).
December 20, 2019, 03:56:12 PM
The new regulation is much stricter than the previous one, and the current view is that any crypto transaction will need to identify itself with the actual user. By this, I mean that some limits that were directed to buying/selling up to a certain amount will no longer be anonymous. It's not just about mining, but everything that is related to cryptocurrency, and that includes even faucets. Main micro wallet FaucetHub has ceased operations, and some new players are also in trouble and require verification of their users so they can continue to use the faucets.
does this apply only to EU-based operations? or also to offshore companies that serve EU customers?
i've seen surprisingly little discussion about the exact consequences this will have for the industry. i've just seen that a few EU-based companies are shutting down and deribit (the netherlands) are implementing KYC. i'm hoping exchanges like binance, bitmex, kucoin, etc will hold the line and stay KYC-free. binance is based in malta so i'm wondering if they'll jump jurisdictions soon as they have so many times before.
December 20, 2019, 02:23:01 PM
If it can make you feel better, even the banks in Europe are struggling to comply with these new directives. Administrations have not stopped giving them additional delays.
AML5 or KYC is a real nightmare to implement in ecosystems already well established. So many drawbacks in Europe for a company.
It's what we call putting sticks in the wheels to prevent pedaling.
I'm sure that if they continue to be so annoying we will see a trend of an exodus of companies that will prefer to go elsewhere, where they will not be so annoyed. And it's quite understandable from a business point of view
AML5 or KYC is a real nightmare to implement in ecosystems already well established. So many drawbacks in Europe for a company.
It's what we call putting sticks in the wheels to prevent pedaling.
I'm sure that if they continue to be so annoying we will see a trend of an exodus of companies that will prefer to go elsewhere, where they will not be so annoyed. And it's quite understandable from a business point of view
December 20, 2019, 07:00:14 AM
Kraken used to allow you to just trade with a name, address and email, but about a year ago required uploading ID and proof of address and your occupation.
I believe it was about the same time Coinbase stopped allowing people to use their 'wallet' functionality without KYC. Coinbase that way trapped tens of thousands of people inside their ecosystem without offering them any time to withdraw their coins before verification becomes mandatory. It was forced upon people, which is a nasty move.
Not sure how Kraken handled their transition to become a full KYC platform, but at least allow people some time to withdraw their funds if they don't want to dox themselves to an exchange.
December 20, 2019, 06:40:25 AM
I haven't heard any of the major exchanges, or anywhere really, mention this. Presumably that means they've taken it in their stride? If it's that onerous and that soon I expect to have heard a great deal more about it than I have.
Kraken used to allow you to just trade with a name, address and email, but about a year ago required uploading ID and proof of address and your occupation.
So there has been a tightening of KYC requirements for anyone in the EU across all the exchanges.
December 19, 2019, 08:30:21 PM
By my understanding of the news some of their big exchanges have either complied to the KYC requirements a long time ago or isn't affected with what they are asking. The only ones who are seriously affected are these services who promote anonymity in their services and they still have the option to comply but they feel like anonymity is more important rather than the survival of their service. So really the ones closing are hard headed people who still think that being identified by the givernment in the crypto market is bad.
Asking a company to force its users to undergo KYC even when not dealing with fiat currencies in any way is crazy, with AMLD5 a mining pool and a faucet with some cryptocurrency-based games would also need to ask its users to provide selfies and dox. Since there's ample competition from countries without such ridiculous laws, the logical step is to shut the businesses down (I assume they ran it as legal businesses so far in their own name, so they can't continue running without complying with the new directive).
December 19, 2019, 12:51:17 PM
I haven't heard any of the major exchanges, or anywhere really, mention this. Presumably that means they've taken it in their stride? If it's that onerous and that soon I expect to have heard a great deal more about it than I have.
By my understanding of the news some of their big exchanges have either complied to the KYC requirements a long time ago or isn't affected with what they are asking. The only ones who are seriously affected are these services who promote anonymity in their services and they still have the option to comply but they feel like anonymity is more important rather than the survival of their service. So really the ones closing are hard headed people who still think that being identified by the givernment in the crypto market is bad.
December 19, 2019, 10:04:09 AM
I haven't heard any of the major exchanges, or anywhere really, mention this. Presumably that means they've taken it in their stride? If it's that onerous and that soon I expect to have heard a great deal more about it than I have.
December 19, 2019, 07:59:09 AM
The new regulation is much stricter than the previous one, and the current view is that any crypto transaction will need to identify itself with the actual user. By this, I mean that some limits that were directed to buying/selling up to a certain amount will no longer be anonymous. It's not just about mining, but everything that is related to cryptocurrency, and that includes even faucets. Main micro wallet FaucetHub has ceased operations, and some new players are also in trouble and require verification of their users so they can continue to use the faucets.
I am not sure how new AML5 treats buying things with crypto, but things are likely to get tighter in the area as well. An easy way to launder money or not pay taxes is to buy something directly for BTC and then sell it for fiat.
I am not sure how new AML5 treats buying things with crypto, but things are likely to get tighter in the area as well. An easy way to launder money or not pay taxes is to buy something directly for BTC and then sell it for fiat.
December 18, 2019, 07:04:50 AM
Regulation can't stop businesses from moving in territories it doesn't apply to. It also can't stop residents where it applies to to stop using those online businesses. Online blocks are so easily circumvented. All bad regulation will do is drive businesses and revenues away... If those websites wanted to continue operations they could. perhaps they will. maybe it's a legal requirement to rebrand.
Not exactly the AMLD5 is built around the security of the EU against crimes related to countries outside of it so I wouldn't be surprised if these acted out like what the US has been doing for overseas operation just like what they did to Binance where we have seen it exit out from the US. Also the AMLD5 is said to be stricter to particular developing countries which they consider a high financial risk so maybe we can expect sites being blocked coming from this countries. And like what I have said earlier both Simplecoin and Chopcoin are given a choice to follow the new requirements and even them has not seen any loopholes for the upcoming regulation.
December 18, 2019, 05:50:17 AM
Regulation can't stop businesses from moving in territories it doesn't apply to. It also can't stop residents where it applies to to stop using those online businesses. Online blocks are so easily circumvented. All bad regulation will do is drive businesses and revenues away... If those websites wanted to continue operations they could. perhaps they will. maybe it's a legal requirement to rebrand.
December 18, 2019, 05:25:15 AM
The solution is already their for both Simplecoin and Chopcoin all they have to do is to comply with the KYC requirement and they won't be forced to shut down their services. Even their users are reported to be more than willing to undergo KYC so that they would still be running but both Simplecoin and Chopcoin are firm with their beliefs and has seen no good alternatives to continue their service just because of this new requirement which for the eyes of any user/client is a selfish thing to do. Both users and developers must widely accept that anonymity in this industry isn't viable anymore when the government started to be more concerned with the industry and we must be prepared to sacrifice it for the continuity of any project, crypto, and the whole market.
December 18, 2019, 05:19:31 AM
One of the many things a business has to realized is that governments will really exercise its regulating and taxing power whenever they wanted to and at their convenience. Now, with that as the reality that we have to consider, a business has to make sure that it can survive the travails of the times by adopting to these realities or shield itself from possible harm by relocating. I think this would be what crypto-related businesses under the banner of EU are thinking right now. With Binance headquartered in Malta, I am wondering how this can be affecting the platform or is Binance already resigned to the fact that they must be fully cooperating with the government to stay afloat in this harsh environment?
December 17, 2019, 10:38:34 PM
This is akin to adopt or go away order from the government of EU. And all member nations have to comply, there is no ifs and no buts. In a way, this is the regulations that the industry is partly clamoring for but many are of course complaining about because the anonymity factor will now be gone. Sooner we will realize that this is just another damn-if-you-damn-if-you-don't kind of thing and firms or units who could not contain the heat will certainly go down or transfer somewhere else where the influence and power of EU is not existing. I am not sure though but even if one is not based in EU but accepting business from citizens under EU still have to be complying with the law. Let's see how can this be affecting the whole cryptocurrency industry...will it withered them or will this make them stronger?
December 17, 2019, 07:55:07 PM
I reckon that this is only the beginning. Malta, where many of the exchanges are based will be required to report their users' data to financial intelligence units under AMLD5.
In any case, what really is AMLD5 and why are smaller cryptofirms shutting down because of it?
Two more firms - cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin - are shutting down over the AMLD5 European Union regulation coming into effect Jan. 10, 2020.
A notice on the Simplecoin website reads that it is closing down on Jan. 1 because the new rules will require the firm to implement several anti-money laundering (AML) know-your-customer (KYC) requirements and it is against those to protect users' privacy.
“When the laws come into effect, we would be forced to require you, the users, to identify yourselves for anti-money-laundering purposes. Mining should be available to anyone and we refuse to jeopardize our users’ privacy,” said Simplecoin.
Another firm, bitcoin gaming platform Chopcoin, also co-founded by Grieger is shutting down for the same reason. AMLD5 imposes more stringent reporting obligations for cryptocurrency firms and authorizes Financial Intelligence Units to obtain the addresses and identities of cryptocurrency owners and users.
Read in full https://www.theblockcrypto.com/post/50613/two-more-crypto-firms-shutting-down-over-impending-eu-money-laundering-rules
In any case, what really is AMLD5 and why are smaller cryptofirms shutting down because of it?
Two more firms - cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin - are shutting down over the AMLD5 European Union regulation coming into effect Jan. 10, 2020.
A notice on the Simplecoin website reads that it is closing down on Jan. 1 because the new rules will require the firm to implement several anti-money laundering (AML) know-your-customer (KYC) requirements and it is against those to protect users' privacy.
“When the laws come into effect, we would be forced to require you, the users, to identify yourselves for anti-money-laundering purposes. Mining should be available to anyone and we refuse to jeopardize our users’ privacy,” said Simplecoin.
Another firm, bitcoin gaming platform Chopcoin, also co-founded by Grieger is shutting down for the same reason. AMLD5 imposes more stringent reporting obligations for cryptocurrency firms and authorizes Financial Intelligence Units to obtain the addresses and identities of cryptocurrency owners and users.
Read in full https://www.theblockcrypto.com/post/50613/two-more-crypto-firms-shutting-down-over-impending-eu-money-laundering-rules
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