11 August 2016

EBA publishes an Opinion on the Commission's proposal to bring virtual currency entities in the scope of the Anti-Money Laundering Directive

The European Banking Authority (EBA) said that bringing virtual currency exchange platforms and custodian wallet providers under the 4th Anti-Money Laundering Directive, as proposed by the European Commission, will be an important step to mitigate risks of money laundering and terrorist financing that arise from the use of virtual currencies. However, the EBA added that clarifications to these amendments are required and that competent authorities across the EU should be equipped with the appropriate tools to be able to effectively supervise the proposed requirements.

The Opinion, which is addressed to the EU Commission, EU Parliament and EU Council, sets out a series of proposals that the three EU institutions should consider before finalising amendments to the 4th Anti-Money Laundering Directive in the second half of 2016. In particular, the EBA recommended that implementation deadlines for the amendments should be set in a way that facilitates their consistent implementation across the EU, and in a way that enables competent authorities to exchange information more easily and efficiently.

Furthermore, national sanction powers as proposed in the EC's amendments should be retained, while transactions in virtual currencies should remain outside of the scope of the Payment Services Directive. Finally, the EBA believes that measures that clarify the regulatory status of virtual exchange platforms and custodian wallet providers should be implemented in order to avoid risks of misrepresentation, including whether these entities should be allowed to carry out regulated financial activities at the same time as carrying out virtual currency transactions. More detail should also be provided to clarify how competent authorities should carry out fit and proper tests for these new entities, as well as to clarify the details and scope of the licencing or registration regime proposed.

Press release

Full opinion

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