The EU Anti-Money Laundering Order No. 5 has officially entered into force. What impact will it have on the crypto field?

According to Cointelegraph reported on January 11, the EU Anti-Money Laundering Order 5 (5AMLD) came into effect on January 10. The regulation became law on July 9, 2018 and aims to increase the transparency of financial transactions to combat money laundering and terrorist financing activities across Europe.

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5AMLD has expanded the scope of supervision for the first time to include crypto service providers such as Virtual-Fiat Exchange or escrow wallet providers. The goal is to give people a clearer idea of ​​who is participating in crypto trading. The reason is that doing so would impede money laundering and terrorist financing. According to a data sheet from 5AMLD, the law will:

• Ethereum 2.0 final specification released! A key step away from going online in 2.0 years
• Former Vice President of the People's Bank of China Suning: The payment cost of adopting digital currency is expected to drop to one tenth of the original
• The Rule of Law Weekend: At least three basic problems must be solved for digital currency to replace banknotes and become the standard of circulation

• Increase transparency of who actually owns legal entities to prevent money laundering and terrorist financing through opaque structures
• Enabling European financial regulators to better access information through centralized bank account registration
• Addressing terrorist financing risks associated with anonymous use of virtual currencies and prepaid bills
• Strengthening cooperation and information exchange between anti-money laundering regulators and the European Central Bank
• Expand the criteria for assessing high-risk third countries to ensure high levels of safeguards for funds entering and leaving these countries.

Of course, the consequence of failing to perform the obligation is a fine! For example, financial regulators in Austria will impose fines of up to 200,000 euros on non-compliant crypto service providers. If crypto companies have to pay 5AMLD fines for violations, then they are not far from closing.

5AMLD impact on crypto service providers

European crypto companies are working to meet the new regulatory guidelines proposed by 5AMLD. Many businesses will face the fate of closure due to the extensive Know Your Customer (KYC) and anti-money laundering (AML) procedures required by the new law. Bottle Pay, a UK-based crypto wallet provider, announced its decision to cease operations late last year. A blog post published by the company on December 13, 2019 reads:

"Since we are a UK-based Bitcoin wallet hosting provider, we must comply with EU 5AMLD regulations that will take effect on January 10, 2020. The amount and type of additional personal information we need to collect from our users will completely change the current User experience, and its negative impact, so we are reluctant to impose it on our community. "

Last September, Bottle Pay raised a $ 2 million seed fund and has now ceased operations. Three months ago in June, the startup launched a tip payment service for users, allowing users to send small amounts of cryptocurrency through social media networks and messaging apps

The conclusion is clear: The European Union is paying close attention to cryptocurrencies and has developed the first set of rules on how companies in this sector must operate. These companies are now either complying or are at risk of not being able to operate at all.

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