Bitcoin Tipping Site Shutdown as EU Regulations Threaten Crypto Collapse in 2020 |
- Hacker News
- Bottle Pay, a social media tipping site based on Bitcoin announces shutdown of operations due to regulatory risk from the 5AMDL regulation.
- EU’s statuary body updated its fourth version this year to increase surveillance of cryptocurrencies and its service providers.
- The regulators will begin enforcement of 5AMLD from 10 January 2020.
Bottle Pay Makes the First Move
Bottle Pay is a Bitcoin tipping site that integrates the lightning network tipping icon on social media sites. It came with Instagram, Facebook, Twitter, and other social media add ons. All the customers required were to link their social media accounts to the bottle pay wallets.
- Hacker News
- Hacker News
Bottle Pay App Tipping Icon on Instagram (Source)
However, the regulations require complete details of the beneficiary and recipient of virtual currency by service providers. This would require KYC compliance and auditing of personal wallet of users. Hence, increase the inconvenience for customers in making even small payments.
They have requested customers to withdraw funds in the next two weeks.
Fifth Anti-Money Laundering Directive (5AMLD)
The new EU regulations require to ‘obtain the addresses and identities of owners of virtual currency.’ Moreover, it also directs against the anonymous use of these digital assets.
Meltem Demirors, the CSO of Coinshare, tweeted,
more companies will have to face the choice to shut down or face unknown consequences due to 5AMLD – it’s impossible to implement effectively, and the risk is too high.
The regulations effectively aim to shutdown privacy-centric cryptocurrencies and increase surveillance on the activities of participants.
G20 Summit also Set Similar Guidelines
Earlier this year as an aftermath to Libra announcement by Facebook, various global statuary bodies discussed the issue. The G20 Summit in June 2019 aims to impose similar restrictions on the use of cryptocurrencies which will require strict scrutiny.
This stands to increase the compliance and legal cost for start-ups, increasing the barrier to new start-ups. Moreover, it also exposes customers to privacy-related risks.
Last but not least, this poses serious risks to the exchanges listing privacy-centric cryptocurrencies like Monero. While Zcash has a dual ability, hence, it enables the partial use of the crypto.
How do you think the new regulations will change the crypto markets? Please share your views with us.
The post Bitcoin Tipping Site Shutdown as EU Regulations Threaten Crypto Collapse in 2020 appeared first on Coingape.
If reproduced, please indicate the source: https://www.uucj.net/bitcoin-tipping-site-shutdown-as-eu-regulations-threaten-crypto-collapse-in-2020/