Deribit Moving to Panama as Dutch Regulations Bite

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Deribit, the Bitcoin margin trading platform, has announced that it is relocating to Panama from the Netherlands due to pressures brought by incoming regulations. Deribit claims that the incoming regulations like AMLD5, which will require registering with the country’s central bank and requesting much more detailed customer information, is too much for them to swallow, and so they have chosen to move rather than comply.

Deribit No Longer Going Dutch

Deribit announced the move in a blog post last week, stating that “a very strict implementation of new EU regulations” by Dutch authorities will necessitate the platform demanding “an extensive amount of information from our current and future customers.” This is clearly something that the company feels it cannot countenance:

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. The implementation of these changes would greatly affect the exchange and its customers. Therefore, we have decided to operate the Platform from Panama.

Dutch Regulators Tightening the Screw

Dutch authorities showed their hand with regard to de-anonymizing crypto trading last year when the Netherlands Authority for the Financial Markets and the country’s central bank, De Nederlandsche Bank (DNB), conducted a joint report in January on the benefits of a crypto licensing system in the country.

The report was requested by Minister of Finance, Wopke Hoekstra, and led to a decision in September to implement the incoming AMLD5 regulations and Financial Action Task Force regulations which required crypto-handling companies to register with the DNB and “demonstrate that the processes are well organized against money laundering and terrorist financing”. In practical terms, this would mean crypto companies conducting in depth AML/KYC information, something that Deribit clearly feels unwilling or unable to comply with.

Deribit not Alone

Deribit is not the first Dutch company affected by the imminently tightening regulations – mining platform Simplecoin announced last month that the new regulations were forcing it to close its business. European companies are also beholden to GDPR regulations on data protection, which can lead to heavy fines for data breaches.

Given the amount of hacks and leaks in the crypto industry, it’s hardly surprising that startups are loathe to have the threat of a crippling fine hanging over their heads as well as the ideological issues with collecting such data.