A UK-based cryptocurrency exchange has shut down because of looming EU regulation. The new law from Brussels – AMLD5 – will force cryptocurrency exchanges to comply with the same regulations as other financial institutions, including submitting suspicious activity to regulators and greater customer scrutiny.
But BottlePay says that it is not willing to gather this data from users, and instead simply cease trading before AMLD5 comes into effect in January. A form of digital cash, cryptocurrency uses encryption to secure transactions and control the creation of new units. It uses cryptography, a form of coding originating from the Second World War, to process transactions securely. Its major appeal is it is independence from established financial systems and it is usually traded through specialist online exchanges.
But there are concerns its anonymous nature can be exploited by organised crime groups and terrorists to launder cash and move money across borders.
A BottlePay spokesman said: “It is with heavy hearts that we announce Bottle Pay will cease operating on Tuesday 31st December 2019 at 13:00 GMT.
“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.
“Therefore, to maintain our integrity as service providers, and to protect the interests of our team, investors and users, we have taken the painful decision to shut Bottle Pay down completely rather than become subject to these new regulations.”
The new EU law introduces regulation for providers of cryptocurrency exchanges and wallets – which must now be registered with the competent authorities in their domestic locations, such as the UK’s Financial Conduct Authority (FCA).