P2P Bitcoin Trading Company CoinTouch Closed Down After GDPR Concerns

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P2P Bitcoin Trading Company CoinTouch Closed Down After GDPR Concerns

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According to the latest update from CoinTouch, the promising P2P cryptocurrency trading platform has been shut down following the notorious GDPR legislation enacted by European legislators. The move sees a swift demise of a promising coin startup that allowed P2P cryptocurrency exchange with little or no fees.

While CoinTouch cannot objectively claim that it was the only startup in the space, the strict GDPR enactment is likely to affect similar startups in the coin economy before long. Most of the exciting new companies are based in Europe and the new legislation could become a serious headache for many website owners who are looking to challenge the dominion of well-established exchanges and big platforms that charge a lot in transaction fees.

The GDPR or the General Data Protection Regulation is the latest in the series of regulations passed in Europe to enact what the governments believe necessary checks and balances in the fintech space, mostly targeted at the coin economy.

The legislation was enacted after four years of extensive preparation and debate from the European powers and was finally approved by the European parliament on 14 April 2018. A May 25 deadline was given to all organizations that were in non-compliance with these latest rules and heavy fines are to be imposed if a lack of implementation is observed after the deadline. These could amount to hefty amounts like 4% of the actual revenue of a company or 20 million EUR.

The most important features of the new ruling included strict compliance of the Know-your-customer (KYC) protocols for all companies. While in essence, the KYC seems like a reasonable ask, companies like P2P trading platforms cannot simply implement them without destroying the fundamental aspects of their operations. So, the regulation is starting to take its toll on them and CoinTouch is the first one to go out because of these latest measures.

CoinTouch’s owner was of the opinion:

“This new EU law hurts small website[s] like mine but helps reinforce the dominance of Facebook, Google, and Twitter, who are able to prepare and defend themselves using established legal teams and cash reserves, and who now face less competition from startups. The EU Cookie Law, EU VAT regulation and now the EU GDPR are all examples of poorly-implemented laws that add complexity and unintended side-effects for businesses within the EU”

The same person is also reportedly operating the StreetLend platform and it may be forced to shut down on the same grounds. While GDPR is seen as a positive step to ensure transparency and accountability of platforms, the wide-ranging effects of the initiative might make grounds for redefining the whole procedure for a nascent industry like P2P cointrading.

Centralized exchanges are more popular with the crypto community due to the ease of use and other features but their high trading fees and centralization of assets may prove to be a vital hindrance for the future of the coin economy as it was originally meant to be decentralized and P2P.

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