Two firms – cryptocurrency mining pool Simplecoin and bitcoin gaming platform Chopcoin – are shutting down as a result of the upcoming EU anti-money laundering rules. AMLD5, the EU’s 5th anti-money laundering directive, will come into effect on January 10, 2020. Among the changes AMLD5 brings about are an expanded scope for regulation regarding crypto platforms and wallets, centrally determined obligations for performing AML due diligence, stricter identification requirements for pre-paid card purchases, and the end of anonymity and privacy for bank accounts and safe deposit boxes.
Simplecoin posted a notice on its website that stated in part:
Simplecoin will become subject to a large range of AML/KYC requirements. It is because under the new Directive, we would be considered a “custodial wallet provider”, a broad definition that will apply to many cryptocurrency operations. When the laws come into effect, we would be forced to require you, the users, to identify yourselves for anti-money-laundering purposes. We have been searching for solutions for a while, but it has become apparent that there is no way around it. We believe in the power of cryptocurrency and its potential. Mining should to be available to anyone and we refuse to jeopardise our users’ privacy. It remains to be seen what impact this will have on mining pools and the cryptocurrency space as a whole.
Both companies notified its users that they have about four weeks to withdraw their balances.