LocalBitcoins, the world’s most widely-used peer-to-peer (P2P) crypto exchange, is reportedly planning to introduce new requirements related to identity (ID) verification for users of its trading platform.
The Helsinki, Finland-based crypto firm has stated that it’s working with local regulatory authorities, in order to implement the European Union’s (EU) newly proposed anti-money laundering (AML) regulations.
According to statements published on its official website, LocalBitcoins’ management said the crypto exchange service will be adhering to the new 5th anti-money laundering directive (AMLD) – which was recently enforced by the European Commission (in July 2018). The directive applies to all transactions involving “virtual currencies” – which includes cryptocurrencies.
Referred to as 5AMLD (or Directive 2018/843 of the EU), the new financial regulations cover the operations of digital asset exchanges and crypto custodian wallet providers. As mentioned in LocalBitcoins’ blog post, EU member states must update their regulatory framework (by January 2020), so that it complies with the new 5AMLD requirements.
Aim To “Bring Bitcoin Everywhere”
Notably, Finland, where LocalBitcoins is headquartered, has already prepared new regulatory guidelines – which ensure that local crypto-related businesses are following EU’s Anti-Money Laundering Act. As mentioned in the announcement, LocalBitcoins has been advising Finland’s financial regulators on matters related to formulating guidelines and standards of compliance for cryptoassets.
According to LocalBitcoins’ mission statement, the Helsinki-based startup aims to “bring Bitcoin everywhere.” The company notes on its website:
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.
Moreover, LocalBitcoins’ management seems to be confident that EU’s new regulatory guidelines will provide “significant benefits” to cryptocurrency traders and investors. Due to the large number of scams and illicit activities carried out using cryptocurrencies (and the traditional financial system), crypto firms have increasingly been taking measures to ensure that their platforms comply with the appropriate regulations.
Preparing Exact Legal Requirements, According To New Guidelines
At present, the exact (new) legal requirements for LocalBitcoins’ users are being prepared, however the exchange’s management has said that the updated regulatory framework will introduce “major changes” to how digital asset trading platforms operate.
As explained in the LocalBitcoins blog post:
We are working to make the transition easy to all users who make legitimate use of our services and already comply with LocalBitcoins’ (terms of service) 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.