Fifth Anti-Money Laundering Directive and Introducing Account Levels
As European Union’s 28 member nation-states adopt the Fifth Anti-Money Laundering Directive or AMLD5, blockchain and crypto companies gear up to comply with the new requirements. At Lykke, compliance has always been at the center of our efforts and the entry into force of the AMLD5 has very little impact on our onboarding process.
Lykke is leveraging AMLD5 to introduce the concepts of account levels in order to formalize the documents/information requirements and resulting account limits for its users.
What is the AMLD5 and what does it mean for Lykke
The new AMLD5 requires crypto exchanges and custodial service providers to register with their local regulator and demonstrate compliance with thoroughgoing know-your-customer (KYC) and anti-money laundering AML procedures.
In addition to the enhanced KYC and reporting obligations, the regime gives greater power and reach to financial intelligence units and law enforcements. To read the directive, follow this link.
As Lykke’s KYC and AML procedures were already in line with the requirements, the AMLD5 impact is limited to the introduction of a questionnaire to facilitate reporting obligations and the establishment of a country risk-rating approach. The questionnaire will be included in the onboarding process for new users. The country risk rating applies to customers’ residence country and is based on the AML Basel Index, FATF high risk jurisdiction list and EU high risk third country list. To view this list click here.
Introducing account levels
To formalize and simplify the understanding of the necessary documents for onboarding and the resulting limits, Lykke is pleased to introduce the concept of Account Levels :
A number of improvements to the document submission process has been made in order to streamline and automate the experience for our users. The changes will be visible in the next application update.
What does it means for existing users
Existing users will be minimally impacted by the AMLD5. As of Monday 20th of January 2020, users will be assigned to the corresponding account Level depending on the documents already provided. When upgrading from Advanced to Pro account level, existing users may be asked to fill out the questionnaire.