Leading peer-to-peer Bitcoin exchange service LocalBitcoins will soon be coming under direct supervision by the Finnish financial regulator the Financial Supervisory Authority (FSA). This is according to new legislation that has been passed by the Finnish parliament which seeks to identify and acknowledge the legal status of cryptocurrency assets in the country.
LocalBitcoins made the announcement on Monday, March 25th, where it noted that the new legislation, which is a proposal by the Finnish financial regulator to the legislation house, would be effective starting November 2019. Dubbed the Virtual Currency Service Providers Act, the new legislation introduces a bunch of Anti-Money Laundering (AML) laws which are aimed squarely at crypto-related service providers such as wallet services and exchanges.
From the perspective of LocalBitcoins, the new legislation is a way for the public to recognize the status of cryptocurrencies which potentially leads to more adoption.
“The Virtual Currency Service Providers Act will come into full effect at the beginning of November 2019 creating a legal status for crypto assets, which should improve significantly Bitcoin’s standing as a viable and legit financial network,” reads the LocalBitcoins announcement.
This legislation may be necessary following a few cases of crypto services providers experiencing trouble with traditional financial services such as banks. The new Act should effectively set the rules for collaboration between the traditional businesses and services providers for crypto-related services.
Earlier this month, LocalBitcoins introduced a new account registration process for new users. These users will now be required to make basic level verifications during the sign-up process which according to LocalBitcoins should make “it easier for the newcomer[s] to find trading partners from day 1 and increase the number of suitable customers to advertisers as well as inhibit the creation of illegitimate accounts.”
As reported previously, the Helsinki-based exchange service is also working on a new identity verification process that is more efficient and reliable. In the Monday notification, the exchange said that a “new id verification system will introduce 4 individual account levels per trade and BTC transaction volume, that should increase trustworthiness and add distinction to the user profile. Corporate accounts will undergo a separate verification process.”