Companies active in the digital currency industry on the Isle of Man will have to comply with the laws on anti-money laundering (AML) in the future and will probably fall within the remit of the Financial Service Commission (FSC) this summer.
The government of the Isle of Man has adapted the Crime Act 2008 in such a way that the Bitcoin exchanges located on the Isle of Man, for example, will now also be affected by the law.
The changes to the laws have already been approved and the following companies will have to comply with AML from 01.04.2015:
“Companies that issue, transfer, store, administer, manage, lend, sell, exchange or accept from persons as a means of payment for products or services the transferable virtual currencies (including crypto currencies or comparable currencies) will be affected by the new regulation.
These companies will have to report to the authorities as soon as they suspect that a user is engaged in illegal money laundering. As a result, companies are encouraged to use “Know Your Customer” or KYC (know your customers) practices and request personal information for verification.
The amendment also includes an obligation to notify the companies concerned so that they can be supervised by the Financial Service Commission (FSC) of the Isle of Man.
The bill will be approved by Parliament on Tuesday. As soon as the law receives the royal approval, which is expected in summer 2015, the FSC will become the competent supervisory authority for anti-money laundering matters.
Phil Braidwood, a member of the Ministry of Finance, pointed out that companies must register within six months of the law coming into force.
“In summary, the news can have a positive impact on businesses as they struggle for the legitimacy and trustworthiness of customers and banks,” said Sian Jones, co-founder of the European Digital Currency & Blockchain Technology Forum.
However, Andrian Forbes, co-founder of Bitcoin company TGBEX, is not so pleased with the news:
“The new legislation sends a positive signal to the Bitcoin companies located on the Isle of Man, but the extra costs involved seem too high for the startups.
Until now, the Forbes company only had to apply the Know-Your-Customer procedure to customers who wanted to buy Bitcoin worth over 12,000 euros. Under the new law, however, the company would already have to collect this data from customers who buy BTC worth 1,000 euros.
Forbes sees the law as a positive development for Bitcoin companies in terms of customer confidence. However, he does not believe that the banks will be influenced by it and will provide Bitcoin companies with an account with immediate effect.