European Parliament intends to expand regulation of cryptocurrency industry

The fifth EU Anti-Money Laundering Directive (AMLD5) no longer meets stricter standardsFATF, and to align its approach withInternational Parliament recommends expanding the concept of cryptocurrencies and the list of related regulated companies in the EU. This is stated in a new report released this week by the organization.

The expert group that presented the report notes a significant growth of token-based platforms and suggests in this regard to introduce “private tokens” as a subcategory of cryptocurrencies.

The document also says that the currentthe regulation does not cover some participants in the cryptocurrency industry, including exchanges that do not support fiat currencies. Such enterprises, the authors of the report say, must also comply with AML (anti-money laundering) requirements.

Additionally, the document draws attention to persons involved in cryptocurrency mining.

“There are coins whose mining is notnecessarily requires large server farms with high energy costs. Such coins can be mined on several hardware installations at home, and the installations themselves can belong to anyone, including criminals, ”— the report says.

Its authors emphasize that the new coins onBy definition, they are “clean”, and if someone, for example, a bank, is ready to convert them into fiat currency or another cryptocurrency asset, the funds received will also be clean.

To solve this problem, the first regulatorya step may be the determination of the methods used, and subsequently the adoption of appropriate countermeasures. At the same time, developers of coins and suppliers of non-custodian wallets are proposed to be exempted, since they provide only the technological infrastructure.

A game of cat and mouse with regulators, or what the new FATF recommendations mean for the bitcoin industry

The report also states thatcryptocurrencies are characterized by increased volatility, as a result of which they carry increased risks for investors. Additional difficulties arise due to the fact that cryptocurrencies hardly fit into the existing financial legislation.

“Currently, EU laws do not prohibitfinancial institutions to hold or gain access to crypto assets, as well as provide related services. If financial institutions decide to acquire them and add them to their balance sheets or use for any activity, they can suffer huge losses. ”, - the document says.

The best way to solve this problem may bethe exclusion of cryptocurrencies from the own assets of such institutions, the authors emphasized, urging European regulators to attribute unregulated cryptocurrencies to high-risk assets.

“The smallest thing the EU can do is introducerisk disclosure requirements that will allow investors and consumers to know about potential risks before they invest in these crypto assets ”,- the document says.

Recall calling for the implementation of standardsregulation of cryptocurrencies in accordance with the recommendations established by the Group for the Development of Financial Anti-Money Laundering Measures (FATF), earlier this year the ministers of finance and central banks of the G-20 countries spoke.