Lack of Transparency Among Reasons for Possible Tightening of Cryptocurrency Regulations in EU
Finance ministers from the European Union’s 28 member states will hold an informal meeting on the challenges posed by Bitcoin and other cryptocurrencies and the possibility of tightening regulations, Bloomberg reported August 29.
According to a draft note seen by Bloomberg, a general lack of transparency and the potential for cryptocurrencies to be used for tax evasion, terrorist financing and money laundering will be discussed in Vienna, Austria, on September 7.
European regulators are also keen on harnessing the new technologies unleashed by digital currencies, according to the undated document. Initial Coin Offerings (ICOs) “have established an effective and efficient way to raise capital,” the document stated, adding that ICOs could help integrate capital markets in the E.U.
In February 2018, the European Securities and Markets Authority (ESMA) has warned customers about ICOs, citing a lack of investor understanding and problems with unregulated financial activities. The ESMA also noted that unregulated exchanges are unprotected due to their existence outside of global financial regulations, which means that customer losses from an event like a cyberattack would not be covered by E.U. law.
The E.U. Fifth Anti-Money Laundering Directive came into earlier this summer setting a new legal framework for European financial watchdogs to regulate digital currencies. The new rules enact stricter transparency requirements directed at the use of “anonymous payments through prepaid cards” and “virtual currency exchange platforms” for the purposes of money laundering or terrorist financing.
Subscribe to our Newsletter<
- Crypto Mining Definition Removed From Russian Digital Currency Regulation Draft Bill
- SEC’s Strategic Hub for Innovation and Financial Technology to Guide Crypto Startups
- European Securities and Markets Authority Injects €1M Into Crypto Assets Monitoring
- Alternative Cryptocurrency Regulation Bills Introduced in Ukraine and Russia
- Ukraine Set to Recognize Cryptocurrencies as a Financial Instrument
- Russian Digital Law Bill Will Not Legalize Cryptocurrencies
- The Reserve Bank of India Bans Regulated Entities From Dealing In Virtual Currencies
- Russian Authorities Prepare Controversial ICO Regulations