After BottlePay’s shutdown announcement last week, two more European cryptocurrency firms have shut down because of the upcoming Anti-Money Laundering (AML) rules in the European Union.
Online crypto gaming platform ChopCoin and mining pool Simplecoin both announced that they are shutting down in under a month in a notice on their website. Both firms cite the EU’s upcoming Anti-Money Laundering Directive that would require the firms to adopt Know Your Client (KYC) measures as the reason for shutting down.
Stringent reporting requirements
Simplecoin explains that the EU’s proposed directive will subject its service to a wide range of AML and KYC requirements. As Cointelegraph explained in a recent analysis, the new regulations were passed on July 9 and member states are required to adopt them by Jan. 10, 2020. Simplecoin stated:
“When the laws come into effect, we would be forced to require you, the users, to identify yourselves for anti money-laundering purposes. [...] Mining should be available to anyone and we refuse to jeopardise our users’ privacy. It remains to be seen what impact this will have on mining pools and the cryptocurrency space as a whole.”
The ChopCoin announcement similarly reads:
“Since we started operating in September 2015 we’ve been giving away approx 30 Bitcoin and introduced thousands of new users to the decentralized revolution. We built a community of dedicated supporters and kept innovating after we pioneered the idea of competitive bitcoin gambling. Unfortunately regulatory concerns and rejecting to force KYC on our users force us to close chop.”
Because of its imminent shutdown, Simplecoin urges its users to withdraw their funds by Dec. 20, and allows them to request the deletion of their user data by Jan. 1 when the platform will be archived and closed. ChopCoin is asking its users to withdraw their funds by Dec. 19 and promises to delete all user data without action on their part by Dec. 31.
Simplecoin and ChopCoin co-founder Christian Grieger told industry outlet The Block that the mining pool has 42,000 users, while the gaming platform had 305,000.
EU regulations have taken a toll on smaller cryptocurrency-related business. Earlier this month, decentralized cryptocurrency exchange CryptoBridge announced that it is closing down in a message on its website.
The company cited market conditions, increasingly strict regulation and a lack of funding as reasons for its decision to close.