A Cyprus financial regulator, the Cyprus Securities and Exchange Commission (CySEC) revealed some new details regarding the efforts to regulate cryptocurrency assets. According to the source, some more discussions are already underway. The purpose of this regulation is to increase the oversight of cryptos and all related assets via integration of EU anti-money-laundering rules into the Cypriot laws. CySEC often ends up being a gateway for many brokers into the EU market, so with these regulations, the industry should become more managed.
“CySEC has been contacted by entities engaging in crypto-asset activities; a number of which do not appear to fall within the existing regulatory framework. As a consequence, CySEC considers the transportation of the parts of the AMLD5 concerning crypto asset activities, into national law, as appropriate,” said one of the investigators of the case.
In June 2018, the AMLD5 was published, which stands for an anti-money laundering directive in pan-Europe. According to this directive, the member states will have until January of 2020 to implement this into their national law. This would be EU’s first attempt to highly regulate cryptocurrency activities within the EU, thus this legislation should be remembered for a while.
According to the AMLD5, cryptocurrency exchanges and e-wallet providers will be brought into the EU anti-money landing rules for the first time ever. The law will impose registration and customer due diligence requirement which will force operators to disclose their traders’ identities, reporting any suspicious activity. This means that anonymous crypto trading will no longer be allowed in the EU states that will implement the AMLD5.
CySEC Santa to go beyond the requirements set out by the AMLD5, and bring in new activities under the AML/CFT obligations. These activities would include:
- Exchange between crypto assets
- Transfer of virtual assets
- Participation in and provision of any financial services which are related to an issuer’s offer regarding the sale of a crypto asset
Regulatory landscape for cryptocurrencies across the globe is getting very complicated, as the local governments and regulators try to manage and exchanges.
But for now, CySEC is still able to feature ESMA-avoiding brokers, who offer trade benefits such as the XM no deposit bonus feature. For now, some traders might be able to benefit from a liberal crypto approach, but in about one year things are going to get much more complicated for many brokers and traders alike.
Cyprus is not the only country considering extending AML regulations to crypto activities. Australia and the United Kingdom are also considering it, which will slowly start to regulate Bitcoin. This might be hinting at a huge change in the future of the crypto world as we know it.
The biggest issue with cryptocurrency is that every country has its own regulation and its own approach. Due to this, there are some discrepancies between states, as some are more welcoming and others are quite cautious.
Though we can’t do much but speculate, for now, it is obvious that these changes will affect more than just EU states, yet all we can do is wait.