Localbitcoins is among some of the Crypto firms based in Finland that have been forced to introduce some changes in response to the new demands by the country’s regulatory watchdog. The Helsinki-based peer-to-peer Cryptocurrency trading platform announced it will improve AML and KYC requirements through the introduction of new identification processes. BTC traders on Localbitcoins will now be forced to give more details in the various account levels on the website.
Localbitcoins Introduces New Verification Requirement
Localbitcoins recently announced that Finland’s Financial Supervisory Authority (FSA) would be “supervising” them. The company added that the legal status for the Cryptocurrencies in the country would be provided by the Virtual Currency Service Providers (VCSP) Act. According to the trading platform, the new law is expected to improve the standing of Bitcoin as a viable and legal financial network.
In response, Localbitcoins said that it has started a new registration process. However, the company has assured users that they will be able to begin trading on the same day they register. Under the new laws, it will now be impossible to create phony accounts on the website.
Cryptocurrency Regulation In Finland
In the last two years, Finland’s regulatory system has been going through various changes. The new regulations have made it hard for Crypto firms to open accounts without verification. The government has been forced to introduce these changes to avoid the use of Cryptocurrencies in money laundering, tax evasion, and other illegal activities.
Localbitcoins is a popular BTC trading platform that supports P2P and OTC Bitcoin exchange in major cities worldwide. The Helsinki operation has been popular in the past as it allowed users to trade privately. The traders could even swap fiat currencies such US dollar and Eurodollar for Bitcoin and vice versa even without KYC processes. However, the users will no longer enjoy these benefits under the new laws.
Whenever there is a change in regulation, Localbitcoins has been on the forefront informing its clients on new requirements. For instance, after the European Union enforced the 5th Anti-Money Laundering Directive (5AMLD), the trading platform notified its customers in February. In its recent notification, the exchange has said that it will impose stricter AML/KYC requirements in response to the FSA’s new Cryptocurrency supervision mandate.
How Crypto Firms Are Responding To New Regulations
Prasos Oy, an exchange and Cryptocurrency wallet provider, is one of the companies that will be affected by new laws in Finland. According to Prasos CEO Henry Brade, there is a risk that their business will freeze if their bank accounts are closed. Although law enforcement officials in the country have about 2,000 BTC seized in criminal cases, according to the treasury guidelines, they can only be stored in a cold wallet and not on an exchange.
In a blog post, Localbitcoins said the robust identification verification process was in response to their users’ demands. The firm has said that there will be four individual tiers on the website. Those holding corporate accounts will be forced to provide more specialized verification method. The company has also said it will announce new verification requirements for each account level soon.