Bitcoin and cryptocurrencies are more common worldwide every day. As such, regulators from everywhere are paying more attention, especially to the Anti-Money Laundering (AML) rules. That’s now the case for Ireland, whose regulators have decided to include crypto assets on their next AML regulations.
According to a recent report by local media, the Virtual Asset Service Providers (VASPs) will be required to register with the Central Bank of Ireland starting in April 2021. Those VASPs include crypto-exchanges, crypto-ATMs, custody providers, and Over-The-Counter (OTC) desks. Besides the initial registration, it’ll be mandatory for them to properly identify their customers (KYC). Equally, the origin and destination of their funds.
If the crypto-companies fail to do so, the Central Bank now has the power “to block senior appointments at the firms or to take enforcement action for failure to live up to AML or CFT laws”. The measure comes as well to fulfill the last European Union AML Directive. The compliant deadline for member states (like Ireland) is by June 2021.
The enforcement actions for legal persons (i.e. companies) breaking the rules include the exclusion of public benefits (such as funding), the disqualification from the practice of commercial activities, and the total closure of their offices. Besides, the minimum jail sentence for the offenders has been increased to four years.
In previous years, the Central Bank of Ireland only issued some warnings about cryptos and Initial Coin Offerings ( ICOs). However, cryptocurrencies were unregulated in the country, and the trades were mostly anonymous. That’s about to change this year.
Warnings beyond crypto in Ireland
In a recent report, the European Securities and Markets Authority (ESMA) warned EU investors about the non-regulated crypto assets. For them, some cryptos are “highly risky and speculative.” However, they also recognize that Bitcoin and cryptos are becoming mainstream, and there’s special concern about stablecoins.
“In the crypto space, Bitcoin price is at all-time highs, fuelled by strong investor demand, positive news reports and the expectation that cryptoassets will ultimately achieve mainstream acceptance. Developments around global stablecoins continue to be under regulatory scrutiny, while sentiment towards central bank digital currencies is shifting positively.”
Last month, the European Central Bank (ECB) declared that they would seek veto power over new stablecoins. For the entity, the accepted coins within their jurisdiction won’t threaten the controls over inflation or the safety of payments. Additionally, the stablecoin issuers would be subject to “rigorous liquidity requirements”.
Other countries, like the United Kingdom and the United States, are also preparing new regulations for stablecoins. Nevertheless, it seems like old-established cryptos like Bitcoin (BTC) and Ethereum (ETH) are mostly welcomed -with proper KYC, though.
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Originally published at https://blog.alfa.cash on March 18, 2021.