EU announces new crypto regulator - AMLD6


The European Union (EU) has announced plans to create a sixth Anti-Money Laundering Authority that will be specifically tasked with regulating the cryptocurrency industry

The European Union (EU) has announced plans to create a sixth Anti-Money Laundering Authority that will be specifically tasked with regulating the cryptocurrency industry. While the Markets in Crypto Assets regulation and the contentious Transfer of Funds Regulation have received most of the attention from the cryptocurrency industry, they are only a small part of a larger package of EU anti-money laundering (AML) policy that will have significant effects on all financial institutions.

The European Council, European Commission, and Parliament are creating a new regulatory body for cryptocurrencies that will have authority over the sector. The new authority will be called AMLD6 and will have direct control over the cryptocurrency sector. In July 2021, the European Commission published its proposal for the AMLD6, or Sixth Directive AML/CFT.

One year later, the European Council made its version public. It will be discussed by the European Parliament after the current August break. The three bodies will begin what are known as trilogues after each has passed its own version of the legislation.

Does the EU crypto market need more regulation? The establishment of an EU-wide regulator for anti-money laundering is a key component of the new legislation. There appears to be little debate over the necessity of such a body and its requirement to have direct control over EU-based suppliers of services for crypto assets, even though the legislative bodies still need to discuss. AMLD6 would be entrusted with monitoring crypto service providers, especially those deemed as being of high risk, unlike earlier anti-money laundering regulations that only provided frameworks for EU nations to gather and share information.

Therefore, it is anticipated that the regulator will limit the potential for jurisdictional arbitrage inside the zone. As the European Parliament sees it, the new system will provide EU-level supervision consisting of a hub and spoke model. This implies a supervisor at the EU level competent for direct supervision of certain financial institutions (FIs), indirect supervision/coordination of the other FIs, and a coordination role for supervising the non-financial sector as a first step.

The Markets in Crypto Assets and Transfer of Funds laws, which do not only apply to the crypto business but to all financial institutions in the block, will not have the same focus as AMLD6, which will have a different emphasis, as the press release says. Recent directives The EU has recently adopted a strict approach to crypto laws. The European Parliament voted in support of anti-anonymity regulations that would increase the cost and difficulty of transactions between unhosted wallets and exchanges, in some cases making them impossible.

And even if a bill to ban Proof-of-Work mining was defeated by the legislative body, the European Central Bank still anticipates that such a ban will eventually take place because of environmental concerns. For the EU, the global organization will mark a significant change. AML directives from 2015 and 2018—particularly four and five—set requirements for member countries to gather and make available specific data, including as details about the beneficial ownership of corporations.

The duration of implementation will depend on negotiations between the European Parliament and ensuing trilogues with the commission. It’s probable that years will pass before the regulation is fully implemented, including AMLA’s staffing. However, it appears that there is little question as to the arrival of such a regulator.

.


Aug 16, 2022 11:16
Original link