Business

Erik Gibbs

Localbitcoins to be supervised by Finnish regulators

Localbitcoins has been billed as a true peer-to-peer cryptocurrency exchange that doesn’t require any oversight, at least by the exchange’s founders. However, the days of not having to follow financial regulations are coming to an end, as the company behind the exchange has announced that it is going to be supervised by Finland’s Financial Supervisory Authority (FSA).

In a blog post, Localbitcoins acknowledged that the Finnish Parliament had approved new legislation on March 13 that gives digital assets legal status. The country’s Parliament also voted to amend the Act on Detecting and Preventing Money Laundering and Terrorist Financing in order to include crypto wallets and exchanges under Finland’s anti-money laundering (AML) laws.

Those moves, asserts the company, will give digital currencies such as Bitcoin Core (BTC), Ether (ETH) and Bitcoin SV (BSV) the legal and public recognition they deserve. It will see them become part of a legitimate financial network and, eventually, become parallel to fiat as a form of currency.

Localbitcoins also states, “…LocalBitcoins is working on improvement measures that will allow us to provide a safer and better service conforming to the regulations. On Monday 18th March, we have launched a new account registration process where users can verify basic information already during sign-up, making it easier for the newcomer to find trading partners from day 1 and increasing the number of suitable customers to advertisers as well as inhibiting the creation of illegitimate accounts.”

The new ID process introduces four individual account levels per trade and per BTC transaction volume. It is designed to enhance trustworthiness and to add “distinction to the user profile.” Corporate accounts will be required to submit to a separate verification process and all the details surrounding the different processes will be released soon.

Many crypto users have decried policies that require adherence to ID and AML regulations. They argue that it goes against the purpose of crypto, arguing that digital currencies are meant to allow for anonymous transactions. However, this belief is misguided and has never been part of the crypto mantra. Privacy is, in fact, paramount to the crypto ecosystem; however, privacy and anonymity are not the same thing. As Dr. Craig Wright states, Bitcoin was created to work within the structure of a legitimate and legal global financial system, part of which prohibits total anonymity.

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