The days of anonymous Bitcoin (BTC) trading are fleeting as the cryptocurrency industry becomes legitimized and governments around the world establish virtual currency regulations to prevent money laundering and terrorist financing.
The latest crypto exchange to be affected by such regulations is the OG Bitcoin exchange, LocalBitcoins, which was one of the last crypto exchanges known for trading Bitcoin anonymously.
LocalBitcoins Has To Enforce AML Procedures
Earlier this week, LocalBitcoins announced on its blog that on March 13, 2019, the Finnish Parliament approved a proposal for a new Act on Virtual Currency Service Providers and an amendment to the Act on Detecting and Preventing Money Laundering and Terrorist Financing (“AML law”).
These proposals will come into effect this November, and will bring virtual currency exchanges like LocalBitcoins under the AML law supervised by the Financial Supervisory Authority of Finland.
To show their compliance, on March 18 LocalBitcoins initiated changes to their registration process, putting an end to the era of anonymous Bitcoin trading on LocalBitcoins.
While this development isn’t overly positive for privacy-centric individuals who value their anonymity, the silver lining is that the new Virtual Currency Service Providers Act will create a legal status for crypto assets and should significantly improve Bitcoin’s standing as a viable and legitimate financial network.
Registration Changes for LocalBitcoin Users
Per the LocalBitcoin announcement, new and existing users must go through the registration process to begin or resume trading on the exchange. Users will need to verify basic identity information upon signing up, which will not only comply with Finland’s AML Laws but improve the LocalBitcoins trading experience.
As stated in the announcement:
“[The new registration process is] making it easier for the newcomer to find trading partners from day 1 and increasing the number of suitable customers to advertisers as well as inhibiting the creation of illegitimate accounts.”
Furthermore, LocalBitcoins stated they will be improving their identity verification process due to popular demand, stating:
“The new id verification system will introduce 4 individual account levels per trade and BTC transaction volume, that should increase trustworthiness and add distinction to the user profile.”
Therefore, while the Finnish LocalBitcoins is undergoing some changes that prevent anonymous Bitcoin trading, it appears that the user experience will improve as a result of this.
Do you know of any anonymous fiat-to-Bitcoin trading services still available today? Is this end of anonymous Bitcoin trading? Let us know what you think in the comment section below.
