UK-based cryptoasset exchange CEX.IO has implemented its previously announced mandatory identification requirement, moving away from previously optional verification.

Financial news outlet Finance Magnates speculates that the move has been made to comply with the European Union (EU) “Fifth AML Directive,” a newly enacted know-your-customer and anti-money-laundering (KYC/AML) law applied to all cryptoasset exchanges and online wallets. The Directive must be complied with by January 2020.

Although the UK may soon exit the European Union in compliance with the now infamous public referendum to leave – known as Brexit – CEX.IO seem keen to remain compliant with European law and stay receptive to EU customers, no matter what happens with the tumultuous Brexit proceedings.

CEX.IO are also a member of the US Financial Crimes Enforcement Network, or FINCEN, a sub-agency of the US Treasury Department tasked with overall KYC/AML inspection and reporting. According to the FINCEN website, CEX.IO is currently authorized to operate in 25 US states.

CEX is quite an old exchange, first opening its virtual doors in 2013. However, according to rankings it is quite a marginal exchange, ranking 71st and trading only $4.6 million in daily volume at time of writing.

Decreasing Anonymity, Increasing Scrutiny

CEX’s switch mirrors other exchanges’ switches. The widely used Shapeshift instant exchange, for example, recently announced its intention to dissolve its anonymous capabilities – a move that met with considerable controversy in the cryptoasset community.

Such moves come amid an atmosphere of increasing government scrutiny into the industry, where even decentralized exchanges – where users are always in custody of their own private credentials and trading is largely peer-to-peer – are coming under attack from regulators.

For example, the IDEX decentralized ERC20 exchange recently announced a block on users connecting from the US state of New York. And Zachary Coburn, the founder of one of the first decentralized ERC20 exchanges, EtherDelta, was recently charged with operating an unregistered securities exchange and hit with $400,000 in fines in order to settle out of court.