Cryptocurrency exchange, Birake, has announced that beginning next year, all users will be required to verify their identities to continue using its services. Like the now-defunct CryptoBridge which made its announcement in October and enforced it immediately, Birake has also pointed to the new Anti-Money Laundering Directive as its reason for enforcing KYC. The exchange confirmed this in a tweet:

In accordance with the 5th European Union Anti Money Laundering Directive, from January 1st. 2020, Birake has to introduce mandatory KYC for all its users. 5th EU AMLD.

As already explained in previous news, the 5th EU Anti-Money Laundering Directive (AMLD5) aims to prevent the use of exchanges for money laundering and financing acts of terrorism. Because exchanges are currently under no obligation to identify suspicious activities, they are susceptible to being used as mediums for illicit financial activities. The new amendment of the AMLD extends the scope of the Directive to include “providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers.”

For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies.

Moving forward, Financial Intelligence Units will be able to link the addresses on exchanges with the identities of their owners.