Deribit , the famous Bitcoin (BTC) and Ethereum (ETH) derivatives exchange leaves the Netherlands for Panama in order to avoid the 5th European Union Anti-Money Laundering Directive (AMLD5) which takes effect from today, January 10, 2020.
Escape from new regulations
As part of AMLD5, exchanges as well as wallet providers will for the first time be subject to EU rules on the fight against money laundering. The law requires registration and customer due diligence (KYC) duty , which requires operators to disclose the identity of their users and report suspicious activity.
The swap decision was communicated on January 9 and the migration will be fully completed on February 10. The Deribit press release states:
“ If Deribit were to fall under this new regulation, it would mean that we would be obliged to demand a lot of information from our current and future customers. ”
Some companies in the industry have chosen to close their doors in response to AMLD5, citing concerns related to the protection of the privacy of their customers. This is particularly the case with the Bitcoin BottlePay payment application and the Simplecoin mining platform .
Deribit, on the other hand, has chosen to relocate. The exchange ensures that the user experience will largely remain the same, but its servers will be moved to London. Everything relating to clients‘ open positions, transaction history, fees, rate limits, wallets, funds, margin agreements and all other systems will be transferred from the Dutch company Deribit BV to the subsidiary. Panamanian.
“ We believe that cryptocurrency markets should be freely accessible to most people, and the new regulations would put barriers too high for the majority of traders, both regulatory and cost. ”
A reinforced KYC all the same
While this relocation decision was made to evade the implementation of an additional KYC , the exchange surprisingly unveiled new regulations on it.
On February 10, KYC will be made mandatory for users who want to be able to withdraw more than 1 Bitcoin in a 24 hour period.
Despite the relocation, residents of the United States are still not permitted to use Deribit’s services. A Deribit sister platform that complies with American regulations could however see the light of day in the near future.
Deribit’s statement concludes that the company reserves the right to immediately close an account and liquidate any open positions if it believes that false information on place of residence has been provided.
Governments around the world now take what is happening around exchanges much more seriously. The AMLD5 shakes a lot already in cryptomonnaies industry and is likely to do even talked about in the coming weeks. With its entry into force today, we can expect that some platforms will soon announce an increase in their knowledge of the customer.