Business 13 February 2019Steve Kaaru
New AML rules and record volumes for LocalBitcoins
Peer-to-peer crypto trading platform LocalBitcoins has notified its users of a change in anti-money laundering laws. In a blog post, the firm said that the new laws by the European Union will require that the platform adjust its policies to comply.
LocalBitcoins is one of the most popular peer-to-peer crypto trading platforms in the world. It is especially popular in areas where traditional crypto exchanges don’t have a footprint.
The 5th EU Anti-Money Laundering Directive (5AMLD) came into force in July 2018. However, it gave a transition period which extends until January 2020. Some countries have already started implementing the law, such as Finland where LocalBitcoins hails from. The 5AMLD is the first law by the EU that takes cryptos into consideration.
In its statement, the firm reiterated its staunch adherence to the set regulations. It touted itself as a pioneer in “adapting to the new standards of compliance for the cryptocurrency industry.” It also reminded its users that the new rules are for their benefit:
“We are confident that the new measures will bring significant benefits to our user base, promoting a safer trading environment and acting proactively in preventing fraud.”
The new regulations will bring major changes to the crypto trading industry. For LocalBitcoins users, the area that it will affect the most is the registration of new users and identity verification. The platform will introduce trade volume-based verification tiers as well as wallet withdrawal tiers.
The firm concluded by promising to make the transition as smooth and stress-free as possible.
Setting new records
The news comes at a time when 23 countries recorded their best ever quarters on the LocalBitcoins platform. A majority of these countries have experienced inflation in the last year. This has led many citizens to seek alternative stores of value, and cryptos have been the big winners.
The biggest volume increase was in the embattled South American nation of Venezuela. The country, which has a national crypto called the Petro, recorded $81 million in the last quarter. The achievement is even more significant given that three years ago, the average quarterly volume was less than a million dollars.
Colombia, Panama and Chile were second, third and fourth on the list. The list is a confirmation of the rising importance of South America as a crypto market. Yet another peer-to-peer trading platform, Paxful, recorded a 188 percent increase in trade volume in South America last year.
Other countries that recorded their best years yet include Egypt, Bangladesh, Argentina, Kazakhstan, Japan and Georgia.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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