Crypto derivatives exchange Deribit to move out of the Netherlands to dodge 5AMLD regulations

Bitcoin futures and options exchange Deribit has announced that it will be moving to Panama and will be operated by DRB Panama Inc., a wholly-owned subsidiary of its Dutch operator Deribit B.V., starting February 10.

The exchange’s move comes ahead of the adoption of "very strict implementation" of new EU regulations that also apply to crypto companies (5AMLD) in the Netherlands. In an online post, Deribit said:

“If Deribit falls under these new regulations, this would mean that we have to demand an extensive amount of information from our current and future customers.”

EU member states are required to implement the Fifth Anti-Money Laundering Directive (5AMLD) into their national legislation on January 10, 2020. Among other things, the regulation is intended to prevent risks associated with the use of virtual currencies for terrorist financing.

The entities providing services such as holding, storing and transferring virtual currencies would be required to “identify their customers and report any suspicious activity to the Financial Intelligence Units,” according to 5AMLD factsheet.

Deribit said that the implementation of these changes would greatly affect the exchange and its customers.

“We believe that crypto markets should be freely available to most, and the new regulations would put too high barriers for the majority of traders, both – regulatory and cost-wise,” it said. “Therefore, we have decided to operate the Platform from Panama. The team and leadership will remain the same, with John Jansen as the CEO.”

In addition, Deribit announced that it will be expanding its KYC requirements as of Feb.10. It said that existing clients will be registered as Level 0 clients and to apply for Level 1 services (unrestricted withdrawals, portfolio margining, etc.), they would have to provide the exchange with passport or some government ID.

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