The Fifth Anti-Money Laundering Directive (5AMLD) came into legal force on 10 January. Since then, financial regulators of EU member states are eligible to request and obtain information helping identify owners of cryptocurrency addresses. National registries are now obliged to disclose information about beneficiaries of companies registered within the European Union. Financial institutions can’t open or operate anonymous accounts or boxes. However, three startups couldn’t do it with those restrictions and shut down.
Based in the Netherlands, Simplecoin declared a cessation of the company and related pool on 20 November 2019. Until 20 December, the users had had a right to withdraw their coins and prior to 31 December, they had been able to delete their accounts’ data. On 1 January 2021, the pool — as well as the website simpleco.in — ceased to exist.
Simplecoin features: a pool with a desktop and web app allowed joint mining of PoW and PoS-powered coins and sent rewards every 6 hours. The company was founded by Christian Grieger and Marvin Janssen in August 2018. The team also included two employees that managed to serve 42 thousand users.
Shutdown explanation: a new obligation to require users to provide identification data is totally inconsistent with the founder’s values. To preserve the principle of mining availability and not jeopardise miners’ privacy, the board decided to go out of business.
Alternatives: f2pool.com, nanopool.org, poolin.com.
Another Netherlands-based startup called Chopcoin, that created a bitcoin faucet, announced the faucet and company shutdown on 18 November 2019. The users had been able to withdraw their rewards prior to 16 December, and on 1 January, the website ceased to operate and an ad appeared on chopcoin.io.
Chopcoin features: a faucet, that distributed satoshis and small fractions of other coins in a multiplayer game, had always sent rewards on time. The endeavour was founded by Christian Grieger and Joshua Stoffels in September 2015. Chopcoin team included two more employees that served 305 thousand players.
Shutdown explanation: the reason was the same to Simplecoin’s both startups had been owned by Christian Grieger.
UK-based startup Block Matrix, that introduced micropayment service Bottle Pay, terminated its business on 13 December 2019. Since that day, users haven’t been able to create new accounts or deposit funds, while payments were refunded. On 31 December, the service disabled withdrawals and deactivated users’ wallets. After that, the company promised to give the unclaimed cryptocurrency to the Human Rights Foundation.
Bottle Pay features: a web app and browser extensions allowed sending micropayments in bitcoins (i.e. satoshi) to users having a social profile. This is how users could reward authors publishing noteworthy posts in 9 social networks. The service had worked from June 2019 and charged its users no fees. In September, the company raised $2 million from the investors.
Shutdown explanation: collection of large volumes of personal data would have negatively affected the user experience. To not expose the community to such a threat and protect users’, team’s, and investors’ interests, the founders decided to go out of operation. However, bottle.li is still online, saying “Effortless Bitcoin payments will be back soon.”
Alternatives: tippin.me, chaintip.org, Brave browser.
It seems that three startups are not enough for stating that the 5AMLD significantly influences the cryptocurrency sector. But, more cases are coming soon. In late 2019–early 2021, dozens of companies shut down or left the EU to avoid those new regulations. The only thing that most non-conformists didn’t blame the Fifth Directive publicly. We have collected other cases — crypto exchanges that disregarded the 5AMLD requirements and didn’t shy away from it. We will discuss them in our next review.