European-based Cryptocurrency companies and services have less than a month to adjust their business activities to new regulation. From 10 January 2020, new crypto regulation, Fifth Anti-Money Laundering Directive (5AMLD) is coming to Europe, requiring KYC, and monitoring all transactions.
18 December, 2019 | AtoZ Markets – Regulators around the world have struggled to place cryptocurrencies within a certain legislative framework. The European Union is about to implement an updated version of legislation called the 5th Anti-Money Laundering Directive. Exchanges have to achieve compliance with the rules by January 10, 2020.
Crypto Regulation Europe will be in Effect from January 10, 2020
Among the most notable changes are that cryptocurrency service providers will have to follow Know-York-Customer (KYC) rules. Besides, all transactions will be tracked, and companies will need to file Suspicious Activity Reports (SARs) with law enforcement.
Regulators approved the updated law in 2018, and all members had 18 months to adapt their businesses accordingly. Time runs out on 10 January. And if the services do not comply with any of these requirements, they will have to pay fines and penalties, or even risk being shut down.
As a former US Treasury anti-money laundering (AML) specialist and current community Head at Elliptic, Carlisle said:
“Many EU companies are not following the safety procedures that have long been considered the industry standard in other regions. The new rules set a standard across the EU that establishes a level playing field for all competitors.
The new regulation will affect some of the most popular cryptocurrency exchanges based in the EU. Unless any company wishes to leave the EU, they should comply in full. The United States introduced similar measures in 2013 and that the European Union seems to be catching up.
Against Money Laundering
In addition, the legislation would also require public access to information about the beneficial owners of any business. Its primary purpose is to help combat possible illicit activities, such as money laundering.
According to co-rapporteur Judith Sargentini, these measures will bring more transparency, helping the EU to stop losing billions of euros:
“Every year, we lose billions of euros because of money laundering, terrorist financing, tax evasion and tax avoidance. We could use that money to finance our hospitals, schools and infrastructure. Together with this new legislation, we are introducing measures that broaden the customer due diligence obligation of financial institutions. This will enlight those who hide behind companies. This rule will keep our financial systems clean.”
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