2020 is shaping up to be a huge year in the world of Bitcoin. Not only will it be the year Bitcoin SV (BSV) returns to its original design with the Genesis upgrade, but the implementation of the EU Fifth Money Laundering Directive (5MLD) will bring sorely needed regulation to the cryptocurrency world. As legal experts have informed CoinGeek, these new anti-money laundering and counter terrorist financing (AML/CTF) laws will completely change the face of the market.
The 5MLD are an expansion of current AML/CTF regulations into the cryptocurrency space, and were designed to protect against potential abuses of the technology by criminal actors. Experts expect the U.K. to implement 5MLD, and the EU has required member states to adopt the regulations by January 10, 2020.
With the new rules, digital asset exchanges and custodian wallets, of which Binance is a great example, are expected to comply with AML/CTF regulations. As Binance keeps offices in Malta, an EU state, they will be required to comply with the new regime. Experts tell us:
Those who fall into these categories must comply with obligations on customer due diligence measures, risk assessments and reporting suspicious activity. They will also be required to register with a relevant supervisor which is expected to be the Financial Conduct Authority (FCA).
This can specifically be a threat to Binance’s current business model, which lacks any serious AML/CTF protocols. The exchange has shown a history of trying to evade stricter regulation, like when they chose to leave Japan in favor of Malta in 2018. But even if they try the same trick again, these regulations will still trip them up.
Experts note that the 5MLD are potentially going to gain additional provisions in the U.K.