August 03, 2016
Last month, the European Commission published a draft directive proposing to extend anti-money laundering (AML) regulation to both virtual currency exchange services and custodial wallet providers. The draft suggests that many Bitcoin companies operating within the European Union will need to apply know-your-customer (KYC) types of checks on their users, to be enforced by 2017.
From the perspective of the European Commission, virtual currencies present a problem as they allow money to circulate easily, and it’s difficult to know who’s transacting with whom. To address this, the E.U. wants to set up checkpoints: Custodian wallet providers and exchange services would be required to monitor transactions on their platform and report suspicious activity.