New Anti-Money Laundering Directive Prompts Deribit to Move Operations Overseas

Prominent Cryptocurrency Futures and Options Exchange, Deribit has announced that it will be moving its operations to Panama.

The derivatives platform announced it is leaving the Netherlands to avoid strict regulations of the Fifth Anti-Money Laundering Directive (5AMLD) that is set to come into force in 2020.

Deribit informed through a blog post that from 10 February 2020 the platform will be operated by DRB Panama Inc., a 100% subsidiary of the Dutch entity.

The latest regulations become effective on January 10, with European countries encouraged to start the implementation of know-your-customer measures for cryptocurrency companies. Cryptocurrency firms will be directed to register with local authorities and obtain information about the source of funds from their users.

European nations are expected to follow the baseline measures of 5AMLD, but every country can individually go above and beyond if desired.

The company claimed the Netherlands’ adoption of “very strict” anti-money laundering (AML) regulations applied to cryptocurrency firms spurred the decision to move elsewhere.

“If Deribit falls under these new regulations, this would mean that we have to demand an extensive amount of information from our current and future customers,” according to the blog post. 

Several cryptocurrency companies decided to close down, citing issues of customer privacy. Deribit, motivated to continue providing their service chose to move their operations.

While the user experience will remain the same, the servers will be moved to London, and all client positions, holdings, equity, trade history, fees, rate limits, wallets, portfolio margin arrangements and other systems will be transferred from the Dutch Deribit B.V. to the Panama subsidiary.

“We believe that crypto markets should be freely available to most, and the new regulations would put too high barriers for the majority of traders, both – regulatory and cost-wise,” said the company.

Additionally, Deribit will also be introducing its know-your-customer (KYC) system. This will be implemented with the help of software firm Chainalysis and verification and payment company Jumio. The KYC requirement will be enforced for traders that want to withdraw amounts higher than 1 BTC per day.

At the same time, U.S. customers will remain barred from operating on its platform.