UK crypto exchange CEX.IO makes KYC mandatory

UK crypto exchange CEX.IO makes KYC mandatory

UK-based cryptocurrency exchange CEX.IO is now requiring all new customers to undergo a mandatory verification process, as part of enhanced anti-money laundering processes.

Announced via a press release published by the firm, the London-based exchange has opted to uprate its onboarding compliance by introducing the measures, in a move thought to be designed to ensure CEX.IO remains in line with UK and EU financial services regulations.

It comes following the findings of a G7-backed blockchain research group report, which found a number of UK-based exchanges were failing on legal requirements around terrorism financing and anti-money laundering protocols.

The requirement coincides with ongoing efforts throughout the cryptocurrency sector, and amongst regulators, pursuing a higher standard of regulation for cryptocurrency businesses and transactions.

CEX.IO was founded as a ‘self regulated’ entity, although the firm is required to comply with the European Union’s Fifth Anti-Money Laundering Directive, as outlined in a post on the CEX.IO blog.

According to the exchange, “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.”

It added, “We previously informed you that verification on CEX.IO would become mandatory. This requirement is already applicable to all new and unverified customers.”

The Fifth Anti-Money Laundering Directive doesn’t come into legal effect until 2020, and only applies to EU-based exchanges and wallet providers.

Given current uncertainties around Brexit and whether the directive will ever have effect in the UK, the compliance effort from CEX.IO can be seen as a proactive step towards delivering a higher compliance standard, and a sign the exchange will guarantee a minimum level of compliance with the new EU-wide measures.

With 2.5 million users, CEX.IO is one of the UK’s foremost cryptocurrency exchanges, and a founding member of CryptoUK, an industry body set up to represent crypto companies. CEX.IO has yet to support Bitcoin SV (BSV) trading and deposits, although the exchange has credited BSV to users who had BCH in their accounts during the hard fork event last November. Users can withdraw their BSV to an external wallet—Centbee and HandCash are probably the most familiar, but there other options such as Electron Cash, Atomic and Guarda.

The 71st largest crypto exchange in the world, the move from CEX.IO could well influence other exchanges to adopt similar measures in strengthening their verification and anti-money laundering processes for onboarding new customers.

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