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The Capital

AMLD5, KYC, & the Recession of Crypto Freedom: Regulations are Here, and They Keep Getting Stricter

By H. S. on The Capital

Key Measures Introduced by the Fifth Directive — AMLD5/KYC for ICOs; AMLD5/KYC for Cryptocurrency

The Fifth Directive establishes what a cryptocurrency is and clarifies what sort of involvement with cryptocurrencies is to be regulated.

Key Crypto/ICO AMLD5 and Crypto/ICO KYC Compliance Measures:

  • Cryptocurrencies and their respective Service Providers are now considered “obliged entities,” and face the same anti-money laundering regulations applied to financial institutions under the previous 4AMLD. Full customer due diligence (CDD) is henceforth required for cryptocurrencies the same way it is under the previous Directive, and suspicious activity reports must be submitted if transactions are made via cryptocurrency.
  • Under AMLD5, financial intelligence units may obtain the addresses and identities of owners of virtual currency, and any irregularities must be reported to the respective national unit.
  • Cryptocurrencies themselves must now be registered with their local authority, such as the Financial Conduct Authority in the UK and BaFin in Germany.
  • Pre-paid cards and online transactions without customer due diligence are now limited to 150€ and 50€, respectively.

What does the AMLD5 Hold for Service Providers within the Cryptocurrency Market?

Crypto Service Providers (CSPs) now must reach out to the regulator in their home country and apply the requirements for their specific activity, or else risk heavy fines and the cessation of their Crypto activities.

“the amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.”

Complying with the directive creates several problems for providers:

  • Perform a risk assessment before the customer is accepted
  • Force a drastically different processing process upon users.

Remaining Compliant to Avoid Fines — AMLD5/KYC for Crypto Companies

There are increasingly more KYC providers in the market, some even offering the collection of identity documents at extremely attractive prices, however, the high inflow of fake documentation in the Crypto space puts at stake the accuracy required to satisfy any international regulatory bodies. It is important to understand the level of verification that goes behind every provider to avoid future regulatory problems now.

  • Shut down

Comply with AMLD5 | Advanced Crypto KYC Services

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