Ripple Labs, the company that was expected to offer a stiff competition to Bitcoin with its Ripple (XRP) digital currency and Ripple Protocol seems to have fallen behind. Thanks to the recent crackdown by US Financial Crimes Enforcement Network (FinCEN) where Ripple was slapped with a $700,000 fine for non-compliance of regulations while operating as a money services business and selling its virtual currency. FinCEN had found that the parent company of Ripple Labs — XRP II, LLC had willfully violated the Banking Secrecy Act by not implementing effective Anti-Money Laundering (AML) program.
Since the enforcement drive, Ripple has suspended all new signups on Ripple Trade. The consumer wallet end of Ripple’s services stands partially affected while the company continues to service its banking and institutional customers. According to Ripple Labs, the company has suspended new signups on its Ripple Trade platform in order to implement compliance features as directed by FinCEN. The company did not make any formal announcements regarding the suspension of new signups on its Ripple Trade platform until last week.
After people started posting on various forums, Ripple has added a small notice on its Ripple Trade website stating that the company encourages its existing users to verify their identity details before August 30, 2015. Identity verification is optional until the deadline and existing users can continue to trade with their unverified accounts until the deadline. It also mentioned that the company is pausing all account signups until further notice.
Answering a question posed by Fortune magazine, Ripple executives have dismissed any rumors of pivoting or restructuring and they have reasoned that the temporary suspension of signups is to ensure seamless transition for current users as it works on improving its customer verification standards. The new identity verification system on Ripple Trade will require users to provide their name, address, date of birth, bank account details, and driver’s license among other documents.
READ MORE: Ripple Labs to Add Additional User Verification Procedures