- 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 will likely decrease the possibility of jurisdictional arbitrage between different member states.
- The European Parliament recently voted in favor of strict anti-anonymity laws targeted at unhosted 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 have direct oversight over the industry.
Further EU Regulations
The European Union is looking to create a new crypto regulatory body.
According to new reportingthe EU is in the process of designing a sixth “Anti-Money Laundering Authority,” or AMLD6, which will have direct oversight over the crypto industry.
While previous anti-money laundering directives had merely established frameworks for EU members to gather and share information, AMLD6 will reportedly be tasked with monitoring crypto service providers, especially those considered “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 likely years away.
AMLD6 will have a different focus from the Markets in Crypto Assets and Transfer of Funds regulations, as these do not limit themselves to the crypto industry itself but encompass all financial institutions within the block.
The EU has taken a tough stance toward 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 outlaw Proof-of-Work mining, the European Central Bank still expects such a ban to eventually occur due to climate concerns.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.