The Fifth Anti-Money Laundering Directive (AMLD5) from the European Union has caused a lot of controversy among cryptocurrency firms across the European Union, with many of these firms having trouble adjusting to a lot of its tenets. However, there doesn’t seem to be any sign that its implementation will be nixed, and several companies are starting to accept their demise. The latest of these companies are Simplecoin, a crypto mining platform based out of the Netherlands, and Bitcoin gaming service Chopcoin.
No Way Across the Directive
Simplecoin published a notice on its platform late last week, announcing that it will be shutting its platform down on January 1, 2020. The firm blamed the impending AMLD5 implementation or this closure, as it explained that the requirement to comply with the Directive’s new Know-Your-Customer (KYC) and Anti-Money Laundering (AML) policies will directly contradict what it believes in.
The firm clarified that they had been looking for alternative strategies to help them continue operating, but none has so far been able to work. Tus, users will be able to withdraw their funds until December 20 after which all wallets and the platform in its entirety will be shut down. However, the basic version of the website will still be available until the end of the year, so users have until then to delete their account information.
New Dutch AMLD5 KYC requirements force first bitcoin company to close. More will follow or decide to leave The Netherlands.[Dutch] https://t.co/RK9dgq6ZRs
— KaleB ☣️????️????????️ (@GKBoris) December 10, 2019
Chopcoin gave a similar excuse on its website, where it was revealed that it would be shuttering its services. The crypto gaming company, which was also founded by Simplecoin chief executive Christian Grieger, has a reported 305,000 users, and since AMLD5 imposes stringent reporting obligations on crypto-related firms, the company has refused to compromise on the ability of its users to gamble anonymously.
Bottle Pay Calls It Quits
Simplecoin and Chopcoin are just the latest of crypto companies to throw in the towel as a workaround for AMLD5 seem impossible to find. On December 13, British crypto payment processor Bottle Pay recently shuttered its services, explaining that the impending implementation of AMLD5 will make it impossible for it to continue operating.
In a press release, the firm, which allows users to send cryptocurrencies via their social media platforms, explained that the AML regulations would “alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.” They also tried to find other means to continue operating, but none seemed feasible.
No Sitting on the Fence in This Battle
The list certainly extends, even as the battle against the implementation of the Directive rages on. Crypto firms in the Czech Republic are currently fighting against the Directive, although at this point, it looks less likely that they’ll make any progress.
— Fitch Ratings (@FitchRatings) May 28, 2019
In the meantime, some crypto firms have also begun to make adjustments to their policies. LocalBitcoins, one of the most popular peer-to-peer cryptocurrency exchanges in the world, recently got approved by Finnish regulators, after the exchange made some modifications to its services (including the removal of in-person trading).
Users have expressed their disappointment with the platform, claiming that it bowed to regulators and moved away from the tenet of anonymity that the crypto industry was founded on. Some of them began to move to rival exchanges, as some of these rivals took notice and immediately started reaching out to them.
It’s a case of “adapt or die” for a lot of these firms, and many are starting to pick their fates.