European Banking Regulator Introduces AML Laws for Blockchain Sector
Cryptocurrency firms based in Europe are to comply with new regulatory guidelines as part of the crackdown against illegal trading. The European Banking Authority (EBA) recently issued amended guidelines to establish new anti-money laundering and counter-terrorist financing laws.
These amendments direct Crypto Asset Service Providers (CASPs) to undertake preventive measures as a defense against the risk of illegal trading activities originating from consumers, products, processing channels, and various jurisdictions.
Regulatory Guidelines for Crypto
These guidelines have outlined how crypto firms can intercept and block illegal financial activities through the use of blockchain analytics tools. The platform further noted that these guidelines are going to come into effect starting 30th December 2023.
The EBA also informed the stakeholders that the latest measures are utilized to further ban illicit financial activities via a harmonious approach for blockchain-based entities as a way to mitigate terror financing and money-laundering practices.
European Regulators Address the Issue of Anonymity Improvement Features
As per European regulators, cryptocurrency firms are often exposed to specific risks in terms of financial holdings and online trading services. On this account, the regulators have included various guidelines as part of the risk management policies to deal with anonymity-improving features.
In the same manner, the amendments also focus on self-storage wallets, private tokens, and decentralized forums that are operational at an inter-organization level.
EU also completed the Transfer of Funds Regulations (ToFR) to resolve the matter of cryptocurrency transfers. Additionally, it the regulatory agency issued broad and wide-ranging Markets in Crypto-Assets (MiCA) policies.
Cryptocurrency investor protection is going to take effect in December but the member states of the EU will be able to avail of an 18-month transitional period for CASPs. In this manner, various blockchain firms will continue to operate in an unlicensed capacity within the allotted timeline.
Bitcoin ETFs Will Democratize Market Access
EU approved Bitcoin ETFs after a few months of the same in the US. Speaking on the matter, a European analyst has recently claimed that the new investment product will open up the markets as well as potentially prompt the next bullish movement.
Traditional finance (TradeFi) and decentralized Finance (DeFi) sectors have reported new trading activities since the approval of various Bitcoin ETFs by the Securities and Exchange Commission (SEC).
This decision has brought about important changes within Bitcoin markets in the US. However, European analysts have observed that Bitcoin ETF activity is on a rising trajectory. The first spot Bitcoin ETF in the EU sector was approved on 15th August 2023.
In this manner, the Euronext Amsterdam exchange listed Jacobi FT Whilshire Bitcoin ETF last year. It gained popularity as the first directly backed Bitcoin ETF in Europe. This ETF was also listed under Article 8 referring to funds that promote environmental and social features.
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