Txbit Exchange— KYC/AML in January 2020, and what’s ahead

Txbit Exchange
3 min readOct 2, 2019


Dear Txbit users,

We would like to inform all of our current and future users that KYC “Know Your Customer” and AML “Anti-Money Laundering” procedures are coming to Txbit for anyone that wants to deposit, withdraw or trade cryptocurrencies. These checks will become mandatory and enforced on the 10th of January, 2020. We feel like it is our duty to inform our users of such changes well ahead of time, something that we noticed is not the case with a lot of other exchanges in recent weeks and months.

We would also like to inform that we will be moving our headquarters and operations to Estonia, a technologically progressive European country that embraced cryptocurrency industry with specific licenses and regulations that have been in force for multiple years. We are already fully engaged in this process of moving the headquarters and receiving the licenses with Financial Supervisory Authority through the Financial Intelligence Unit Estonia. Please read the rest of the update to understand why we are moving to Estonia.

Why are these changes coming?

Crypto industry has become somewhat of a “wild-west” after the unprecedented growth it has seen in 2017–2018. Lack of regulations around cryptocurrency and especially the services that companies provide for cryptocurrencies, have allowed misbehaving parties to fester and grow leading to countless reports of user funds going missing without any consequences for the parties involved. Exit scamming, wash trading and other malicious threats have become a norm, and not much can be done about this without proper regulatory framework and clear cut rules.

Law makers around the globe have been discussing and introducing updated, or in a lot of cases brand new, guidelines that service providers such as crypto exchanges must follow. On a European level, since Txbit is a European based company, 5th EU Anti Money Laundering Directive (AMLD5) was published on July 2018, and all EU member states must enforce the minimum provided guidelines on the national level by the 10th of January, 2020. On top of this, each state may add additional regulations and rules as it sees fit.

The new regulations apply to essentially all cryptocurrency services, as KYC/AML checks will be required not only for services that exchange crypto to FIAT, but any service that is a Custodian Wallet Provider, i.e. it service holds users funds, is also regulated by the AMLD5.

Many EU countries have already established AMLD5 regulations in their respective jurisdictions, while others have have left it until the last day to enforce them. The Netherlands has also kept quiet regarding the extent of the regulations they want to introduce up until August of 2019. Unfortunately the Dutch law makers have decided not only to introduce the guidelines set-out in AMLD5, but also additional regulations which would put a basic crypto to crypto exchange to the same compliance scrutiny as a national bank. After careful examination and deliberation, we made a decision to move our Headquarters to Estonia. Estonia has been a global leader in adopting the EU regulations, as well as creating specific licenses and clear cut rules for crypto service providers.

Our reflections and outlook going forward

While there will certainly be some people who are not happy about these changes, we are firm believers that regulatory framework is required and will do a whole lot more good than bad in the long run. A lot of clearly shady exchanges with wash trading have closed doors in recent months, and we suspect that more will follow suit. KYC/AML also expands the service offerings we may provide in the future, such as FIAT exchange on Txbit for EUR/USD, Futures/Margin trading, regulated tokanized company share trading, etc. All of these features and services we are actively working on to provide in 2020, with FIAT integration expected to go live in Q1 of 2020.

In short, we are looking 5 years ahead with a positive outlook and see Txbit becoming a go-to place to buy/sell/trade cryptocurrencies with a wide range of service offerings.

About Txbit.io

A cryptocurrency exchange built from the ground up to meet today’s demands in security, privacy, reliability and speed. The proprietary trading engine and interface deliver a blazing-fast, world-class user experience catering to traders who enjoy spending some time behind the charts, but also to those who prefer to be in and out quickly.

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