Why Deribit is Leaving the EU
In a dramatic shift reminiscent of a soap opera plot twist, Deribit B.V., the Netherlands-based crypto derivatives exchange, has chosen to pack its bags and wave goodbye to the European Union. The reason? New Anti-Money Laundering (AML) regulations that threaten to cramp its trading style. As of February 10, 2020, the platform will be officially run by its daughter company, DRB Panama Inc. The statement released by Deribit on January 9 hinted at a proactive pivot to face the tightening scrutiny seen across Europe.
Understanding 5AMLD and Its Implications
The term 5AMLD may sound like a government secret code, but it refers to the Fifth Anti-Money Laundering Directive adopted by the EU. This directive enforces stricter regulations on crypto operations, demanding a trove of personal information from users. According to Deribit, such extensive requirements would erect significant barriers for traders, costing them both time and, of course, money. A sentiment echoed across various platforms could be summed up in a collective sigh of frustration from crypto enthusiasts.
New KYC Policies: Safety or Barrier?
As part of its midlife regulatory crisis, Deribit is rolling out revamped Know Your Customer (KYC) requirements. The exchange plans to team up with verification service Jumio and compliance tool Chainalysis to implement these requirements. With multiple customer activity levels based on KYC completion, investors might find themselves jumping through hoops, or at least doing pirouettes, as they navigate this new landscape of user verification.
Comparing Crypto Tax Havens: Malta vs. Panama
Malta has long been a go-to destination for crypto exchanges looking to skirt stringent regulations. With companies like Binance and OKEx having established bases there, Panama’s emerging status feels like the new kid on the block. However, Malta’s adherence to EU regulations creates its own set of hurdles, distancing it from the days when it was a cocktail party island. In contrast, Panama’s relatively laissez-faire approach is enticing companies seeking to escape heavy-handed regulations.
The Ripple Effect: Industry Response
The decision of Deribit has sent shockwaves across the crypto sphere, sparking debates about compliance, user privacy, and the future of crypto exchanges in Europe. As more companies scramble to find regulatory-friendly environments, this trend could mirror a game of musical chairs, where only the most adaptable survive. Staying flexible will be key as traders and exchanges respond to the evolving nature of the business.
