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Localbitcoins to Introduce New User Verification Rules

Peer-to-peer crypto swap Localbitcoins is preparing to implement updated requirements for the identity verification of its users. The company recently revealed it’s cooperating with regulatory forces in Finland on the implementation of the latest EU anti-money laundering rules.

Also read: 3 Technical Proposals for Increasing Bitcoin’s Solitude

P2P Exchange Localbitcoins Advising Finnish Regulators

In a statement published on its website this week, the popular P2P coin profession platform Localbitcoins explained why the upcoming changes are necessary. The new 5th Anti-Money Laundering Directive (5AMLD), which was enforced by the European Commission in July 2018, shrouds virtual currencies. 5AMLD, or Directive 2018/843 of the European Union, also includes cryptocurrency exchange services and custodian notecase providers in its scope, Localbitcoins noted.

Localbitcoins to Introduce New User Verification Rules

EU member states now have until January 2020 to transpose the new 5AMLD demands into their national legal frameworks. Finland, where Localbitcoins is based, has already drafted new legislation anent digital currency services that amends the country’s Anti-Money Laundering Act in accordance with the European directive.

Agreeing to the announcement, Localbitcoins has been a pioneer in advising Finnish regulatory agencies in this process and adapting to the new standards of compliance appropriate to the cryptocurrency industry. The Helsinki-based company believes its mission is to “bring Bitcoin everywhere.” It says that “by being a mention in compliance, we also aim to promote trust, legitimacy and maturity in the Bitcoin ecosystem, while paving the way for it to become a more feasible and widespread currency and combating criminal use of Bitcoin and its network.”

Changes to Affect Account Registration and Verification

The Localbitcoins duo has also expressed confidence that the new measures will bring “significant benefits” to users by promoting a safer buy environment and preventing fraud. Although the exact legal requirements are still under preparation, the exchange notified customers that they will bring “major changes” to how crypto trading platforms operate. The company further thorough:

The most important changes concerning Localbitcoins’ users will be related to improving the registration of new accounts and the identity verification answers, introducing wallet withdrawal and trade volume-based verification tiers.

The Finnish company also said it’s working to smoothen the conversion for those customers who make legitimate use of its services and already comply with their terms. For years, Localbitcoins has been a benchmark tenets among peer-to-peer cryptocurrency exchanges. It connects buyers and sellers of digital coins around the world on geographical principle allowing crypto purchases through an escrow system.

A Benchmark Exchange and Its Alternatives

Localbitcoins was founded in the summer of 2012 and got popularity among crypto traders who were able to exchange digital currencies in a relatively anonymous manner. In what way, a few years ago the company introduced a feature allowing users to voluntarily upload their IDs.

Localbitcoins to Introduce New User Verification Rules

Later, those who traded heavy-set amounts of bitcoin were reportedly asked to upload a copy of an ID document. Last spring, the platform updated its articles of service due to new EU regulations and included identification requirements in certain situations, as news.Bitcoin.com reported.

A number of other peer-to-peer and decentralized crypto interchanges have emerged over the years. These include platforms such as Paxful, Bisq, Bitsquare, Coinffeine, and Hodl Hodl. New trains continue to create similar exchanges. In November, a startup from Norway announced the launch of a peer-to-peer cryptocurrency marketplace rallied Bitruption.

Are you using the services of Localbitcoins or any of the other P2P exchanges? Tell us in the comments section below.


Images courtesy of Shutterstock.


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Tags in this story-line
5AMLD, AML, Cryptocurrencies, directive, EU, Exchange, Exchanges, KYC, Legislation, LocalBitcoins, N-Featured, p2p, Peer-to-peer, requirements, Standards, Traders, alcohols
Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Bulgaria, which sometimes finds itself at the forefront of prepays it cannot easily afford. Quoting Hitchens, he says: ”Being a writer is what I am, rather than what I do.“ Cosmopolitan politics and economics are two other sources of inspiration.

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