EU creates new crypto regulator: Report
Important takeaways
- The European Union is currently designing a sixth “Anti-Money Laundering Authority”, which will have the specific purpose of regulating the crypto industry.
- This new regulatory body is likely to reduce the possibility of jurisdictional arbitrage between different member states.
- The European Parliament recently voted in favor of strict anti-anonymity laws aimed at non-hosted crypto wallets.
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A new crypto regulatory body is being designed by the European Parliament, the European Commission and the European Council that will directly oversee the industry.
Additional EU regulations
The European Union is looking to create a new crypto regulatory body.
According to new reporting, the EU is in the process of creating a sixth Anti-Money Laundering Authority, or AMLD6, which will directly oversee the crypto industry.
While previous anti-money laundering directives had only established frameworks for EU members to collect and share information, AMLD6 will reportedly be tasked with monitoring crypto service providers, particularly those deemed “high risk”. The regulator is therefore expected to reduce the opportunities for jurisdictional arbitrage within the zone.
The creation of the new regulatory body will depend on trilateral negotiations between the European Commission, the European Council and the European Parliament. All bodies have reportedly expressed a need for tighter regulations in the industry. The implementation of AMLD6 is still probably years away.
AMLD6 will have a different focus than the Markets in Crypto Assets and Transfer of Fund regulations, as these are not limited to the crypto industry itself, but include all financial institutions within the block.
The EU has taken a tough stance on crypto regulations. The European Parliament recently voted in favor of anti-anonymity laws that would make transfers between unhosted wallets and exchanges costly, cumbersome or even impossible. And while the legislative body rejected a proposal to ban Proof-of-Work mining, the European Central Bank still expects such a ban will eventually arise due to climate considerations.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
