Cryptocurrency
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| Cryptocurrency |
European Parliament intends to expand regulation of cryptocurrency industry
The fifth EU Anti-Money Laundering Directive (AMLD5) no longer complies with the stricter FATF standards, and to harmonize its approach with the international, the European 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 report also says that cryptocurrencies 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 prohibit financial institutions from holding or gaining access to crypto assets, as well as providing 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 be to exclude 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 to introduce risk disclosure requirements that will allow investors and consumers to know about potential risks before they invest in these crypto assets,” the document says.
Recall that a call was made to implement cryptocurrency regulation standards in accordance with the recommendations established by the Financial Action Task Force on Money Laundering (FATF) Development Group; earlier this year, G20 finance and central bank ministers made statements.
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 current 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, the mining of which does not necessarily require 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 new coins are, by definition, “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 regulatory step may be to determine the methods used, and in the future, 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.
The report also says that cryptocurrencies 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 prohibit financial institutions from holding or gaining access to crypto assets, as well as providing 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 be to exclude 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 to introduce risk disclosure requirements that will allow investors and consumers to know about potential risks before they invest in these crypto assets,” the document says.
Recall that a call was made to implement cryptocurrency regulation standards in accordance with the recommendations established by the Financial Action Task Force on Money Laundering (FATF) Development Group; earlier this year, G20 finance and central bank ministers made statements.
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 current 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, the mining of which does not necessarily require 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 new coins are, by definition, “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 regulatory step may be to determine the methods used, and in the future, 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.