The European Union 5MLD, or E.U. Fifth Money Laundering Directive, is set to go live in the United Kingdom on the 10th of January 2020. The new directives aim to bring open-source software under customer due diligence and subject the same to anti-money laundering policies.
Through the latest legislation, MH Treasury seeks to control digital assets, primarily cryptocurrencies. Open-source developers create code for cryptocurrencies which in turn power the digital assets economy.
Published in April 2019, the directives targeted a range of activities including Bitcoin, crypto services and virtual assets. As the deadline looms, experts in the crypto space fear repercussions.
European Union 5MLD has extensive coverage
The European Union 5MLD covers most activities in the crypto space. It covers crypto-to-crypto exchange service providers, P-2-P exchange solutions, initial coin offerings and open-source software publication. Many experts are of the view that the new legislation will be very difficult to implement, considering its wide and vague scope.
Industry leaders such as Litecoin creator Charlie Lee, Monero’s Riccardo Spagni, and Samson Saw of Pixelmatic; all agree that European Union 5MLD will not be implemented fairly.
Spagni adds that financial law enforcement by the regulators is mostly vague. Banks are made responsible for such supervision, and they fail dramatically. With the advent of software, especially open-source software, authorities are struggling with fixing responsibility for financial supervision.
Why crypto experts fear EU 5MLD
The European Union 5MLD doesn’t make complete sense as per the industry leaders. Charlie Lee, the Litecoin creator, is curious how the regulators would track anonymous developers. The technology that underpins cryptocurrencies is far more complex than just simple open-source classification.
UK Open Rights Group says that open-source software is a helpful endeavour that brings technology to many across the world. The power to surpass jurisdictions is the primary advantage. Clearly, the European Union 5MLD is a step in the opposite direction so far.
Featured Image by Pixabay