The EU is tasked with coming up with laws that all of its member states must follow. However, the individual states are free to go further than the laws to tighten restrictions even more, which has been the case with cryptocurrency.
In May 2018, the EU announced its Fifth Anti-Money-Laundering Directive (AMLD5) to prevent criminal financial activity and this directive covered the cryptocurrency sphere as well. The laws are not due to be established in individual state laws until January 2020, but countries have already been at work to make sure they are following EU law – but have also gone beyond the legislation in many cases.
What Did the AMLD5 State?
The rules set out by the EU stated that a series of laws would be enforced on crypto exchanges and wallet providers. Many of the central laws to come into force covered KYC (know your customer) and required operators in the industry such as providers of the Luno Bitcoin Wallet to know more about the people who were using their crypto product. These laws, among others, would go a long way to stop money laundering from occurring. Yet, most nations have tightened restrictions much further.
Germany Chasing Out Crypto Business
Germany is often regarded as the powerhouse of the EU and the country has not held back when it comes to regulating crypto in line with the AMLD5. They are requiring all companies operating in the industry to apply for licenses at their financial regulation authority (BaFin) before AMLD5 comes into play.
Some of the changes provide more clarity to business using crypto, but to others they just present more obstacles and red tape. The latter group even view the changes as chasing away crypto businesses – and there is evidence to back them up.
Bitpay is one of the most well-known and celebrated companies executing transactions in cryptocurrency and fiat currencies. Following the rule changes, they have decided not to offer their services in Germany anymore and are instead sticking with their many other markets. Notably, Bitpay has been supporting other German businesses to accept crypto payments, such as Lieferando, who will now not be able to offer such options to their customers.
Other Countries Tightening the Crypto Noose
Germany is not alone in making it more difficult for crypto businesses to operate off the back of the EU directive. The Czech Republic, Estonia and France have also made restrictions tighter. Yet, not all countries have gone further than EU requests with The Netherlands shunning proposed restrictions and majorly sticking with the basics of the AMLD5.
Although these changes may make it harder for businesses to offer crypto services, they also make using cryptocurrency safer for the masses and mitigate or prevent criminal activity from occurring – which should also be celebrated.
