London-based digital trading platform, CEX.IO will no longer allow anonymity of users on its platform. The exchange users will have to disclose their identities.
The exchange claims itself to be self-regulated. Notably, European Union law that is the Fifth Anti-Money Laundering Directive addresses digital currency exchange platforms along with custodian wallet providers. The Directive will be mandatory in each EU states from January 2020. However, UK may not be included in it.
Explaining the exchange decision the company states that it will “provide users with high-level and reliable service.” Moreover, Serhii Mokhniev, Regulatory Affairs Counsel at CEX.IO stated, “We have always understood the importance of dealing with virtual currency within a legal framework, so mandatory verification for customers who transact in fiat currency was introduced long before the Fifth Anti-Money Laundering Directive was adopted in the EU.” As it seems, the exchange took this decision in order to comply with the CEX.IO regulations and to ensure security.
Notably, CEX.IO was established in 2013, which initially started as a cloud mining provider. Now, the exchange provides support to eight major digital currencies and four major fiat currencies on its platform. The exchange holds daily trading volume around $4.9 million.
As the exchange is a registered member of the Financial Crimes Enforcement Network (FinCen) of the US Department of the Treasury, it has to comply with U.S. law. Moreover, it was reported that crypto exchanges in the UK were less likely to involve in money laundering, seems CEX.IO wants to be on the safer side.
Reportedly, the U.K. and EU both declared that they are outlining a crackdown on money laundering and tax evasion especially enabled by crypto. More precise regulations are intended to decrease the amount of anonymity for cryptocurrency traders.
On this, U.K. Economic Secretary to the Treasury Stephen Barclay spoke, “The U.K. government is currently negotiating amendments to the Anti-Money Laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.”