CEX.IO, a London-based cryptocurrency exchange, now requires that all customers reveal their identities, according to a press release. The change relates to cryptocurrency to cryptocurrency transactions – fiat currency users were already required to identify themselves.
The exchange, which was founded in 2013, classifies itself as self-regulated. This is important in the UK because there, the only regulation relevant to such businesses is a European Union law – the fifth Anti-Money Laundering Directive. The law specifically includes virtual currency exchange platforms and custodian wallet providers.
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CEX.IO says that the decision was made to “provide users with high-level and reliable service.” The company’s Regulatory Affairs Counsel, Serhii Mokhniev, said: “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.”
The directive becomes mandatory in all EU states in January 2020. The UK may not be counted among their number by then, but cryptocurrency businesses are international affairs, so they are unlikely to be motivated by a call to take our country back. CEX.IO, for example, claims 2.5 million users across the globe and is a registered member of FinCEN, a regulatory branch of the US Department of the Treasury.
It is also one of the founding members of CryptoUK, an organisation by and for British cryptocurrency businesses. One of the aims of the association is to persuade the government to regulate the blockchain industry, which it has not yet succeeded in doing.
On Monday, a report was released by a G7 research group which found that there is a big cryptocurrency exchange-shaped hole in the UK’s money-laundering and terrorism-financing detection system. The Financial Conduct Authority, the UK’s financial watchdog, is in no rush whatsoever to remedy this.
CEX.IO supports eight major cryptocurrencies and four major fiat currencies. It is a relatively minor venue, handling $5.2 million in cryptocurrency trades over the past 24 hours, according to coinmarketcap.com. It does not appear to be affiliated with London-based electronic goods retailer CeX.