May 19, 2024

The EU has adopted new rules for regulating cryptocurrency services

The EU has adopted new rules for regulating cryptocurrency services

On January 10, the Fifth EU Directive onAnti-Money Laundering (AMLD5), replacing the previous directive and extending its provisions to participants in the virtual asset space. The first amended document would be published in the Official Journal of the European Union on June 19, 2018.

“Obligations are imposed on credit organizations and other financial institutions in the EU to implement comprehensive customer verification measures in accordance with Directive (EU) 2015/849 (AMLD4),- explains the European Commission.

Directive (EU) 2018/843 (AMLD5), after being introduced into the legislation of the member states, will expand the list of responsible entities to virtual currency exchanges and custodian wallet providers. ”

Being “responsible entities”, supplierscryptocurrency services should now follow the same rules that apply to banks and other financial institutions, including being registered with the relevant national authorities.

“The rules apply to entities providing services related to the storage and transfer of virtual currencies,adds the European Commission.

These new entrants will need to identify their customers and report any suspicious activity to the financial supervisor. ”

Amendments to the document also provide thatEU member states will create a central database, which will contain information about cryptocurrency users and their wallet addresses, as well as allow national financial supervision services to access it.

"To counter anonymity relatedrisks, national financial supervision services should be able to receive information that will allow them to associate the addresses of virtual currencies with the identity of the owner of virtual currencies ”, - the document says.

EU members ready for regulation

EU member states started earlyprepare to ensure compliance with new requirements by implementing them in your laws. Some of them remained silent until the last moment. Thus, the Financial Supervision Authority of Great Britain (FCA) only on Friday reported that it was he who was entrusted with the task of monitoring compliance with the requirements for combating money laundering and terrorist financing among participants in the cryptocurrency industry.

“Since January 10, 2020, we have been the regulator of AML / CTF for British companies in the field of cryptocurrency assets”, - reported in the department.

FCA explains that cryptocurrency exchanges, suppliersexchange terminals, peer-to-peer platforms, custodial wallets and token issuers using, among other things, ICO and IEO models, must comply with the established requirements.

Austrian Financial Market Authority(FMA) on Thursday announced that it is now the regulator of virtual currencies in the state. Starting January 10, companies involved in the issuance, sale, transfer, trade, and exchange of cryptocurrencies must be registered. Registered companies must ensure that their practices are in compliance with legal standards and establish reporting transfers to counter money laundering and terrorist financing.

FMA notes that it has been accepting applications for registration since October 1, 2019 and adds:

“Unregistered suppliers from this day can no longer offer their services in Austria. A fine of up to € 200,000 is provided if the supplier does not register. ”

France turned out to be one of the most advancedcountries in the context of crypto regulation - the relevant legal norms were approved here in April. French financial market regulator Autorité des Marchés Financiers (AMF) published new requirements for virtual asset service providers on December 20. Also recently, the agency for the first time in its history approved the ICO.

Finland began regulating the cryptocurrency industry in May, and in November, the Financial Supervisory Authority (Fin-FSA) approved five of its companies, including the localbitcoins peer-to-peer exchange.

Central Bank of the Netherlands (De NederlandscheBank) was also preparing for the regulation of cryptocurrencies - in September, he requested information from industry participants. “Companies offering exchange services between cryptocurrencies and regular money, as well as crypto-wallet providers, must register with the central bank,” the regulator said in a notification. However, on January 10, he announced that the new requirements had not yet entered into force.

Incorporation of AMLD5 requirements into lawGermany led financial institutions to sell and store cryptocurrencies for their clients along with other investment mechanisms such as stocks and bonds. To provide such services, they require permission from the Federal Financial Supervisory Authority (BaFin).

Run or close?

Crypto companies have already been able to feel the impactAMLD5 requirements on themselves, while some countries, such as Lithuania, have decided to set even stricter standards than European legislation provides. A number of companies against this background decided to move into jurisdictions with more favorable regulation, others completely closed.

Deribit Crypto Derivative Platform Thursdayannounced that since February 10, the Dutch company Deribit B.V. will no longer be its operator. The management of the trading platform will be transferred to the formation of DRB Panama Inc. As the company explained, ensuring compliance with the new requirements would entail high costs and the need to collect significant amounts of customer information.

“Cryptocurrency markets should be freely available to most,Deribit declares.

The implementation of these changes would have a significant impact on the exchange and its customers. So we decided to manage the platform from Panama. ”

Several other European companies have suspended operations ahead of the entry into force of AMLD5. Bitcoin Bottle Pay, a UK-based payment service, closed on December 31.

“The amount and type of additional personal data,which we have to collect from users will have such a drastic and negative impact on the current experience of interaction that we do not want to expose our community to this. To maintain our integrity as a service provider and protect the interests of our team, investors and users, we made a painful decision to completely close Bottle Pay ”, - explained in the company.

A similar decision was made by the Simplecoin mining pool and the Chopcoin gaming platform.

The positive effect of these changes inIn the long run, there may be increased confidence in European cryptocurrency companies. In particular, some experts suggest that banks will be more willing to work with them, while institutional investors will invest their capital in them.


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