Bitstamp Bitcoin Exchange Steps Up AML Requirements By Asking Customers Thorough Questions


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It is not surprising to see bitcoin exchanges step up their AML requirements. The banking system requires their partners to perform thorough checks on all clients before handling their funds. Bitstamp, one of Europe’s largest bitcoin exchanges, has made some major changes as well. The company is now asking detailed questions as to the origins and purpose of funds transferred to the Bitstamp account in question.

Bitstamp is not the first exchange to ask AML-related questions to customers. Failing to provide a satisfying answer will result in deposits getting bounced, though. Bitcoin companies need to thoroughly vet the nature of all incoming and outgoing funds on their platform. However, bitcoiners generally do not appreciate such invasive questions. It remains to be seen if this will negatively affect Bitstamp‘s status in Europe, though.

Bitstamp Demands Answers Regarding Account Balances

Among the questions asked are what one would expect from a financial organization. Bitstamp wants to know what the current occupation of their users is. Moreover, they want to identify the purpose of the exchange account in question. This can be for trading purposes, buying bitcoin, converting cryptocurrency, et cetera. Although some people feel this is not the company’s business, it is not an outrageous question to ask either.

Furthermore, Bitstamp wants to know the source of funds transferred to the account. Financial documentation will certainly help in this regard. They also aim to uncover the purpose and destination of bitcoin withdrawals. This latter part if quite interesting, as it reduces bitcoin privacy even further. Not that the popular cryptocurrency has any privacy traits, to begin with, though. Then again, these types of questions will ensure no one can conduct illicit activities with their money.

For the time being, it appears Bitstamp is satisfied with most [brief] answers. As long as users provide some plausible explanation, things should be fine. Refusing to answer the questions could turn out to be problematic, though. Bitcoin exchanges need to adhere to strict AML requirements and asking these questions is part of the process. It is unclear how this will affect bitcoin’s status in Europe moving forward.

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