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New Aml regulation: From ‘virtual currency’ to ‘crypto assets' — differentiation from tokenised financial instruments and potential concerns over the perceived end of pseudonymity in the crypto sector
Journal of Financial Compliance,
5
(4),
350-358
(2022)
Abstract
In adopting new regulatory measures, the EU is increasing its efforts to prevent money laundering and terrorist financing. Aside from a uniform and EU-wide ban on cash transactions over €10,000 and the establishment of a common European anti-money laundering (AML) authority, the new rules specifically tackle the growing crypto economy. While existing AML regulations already cover various business activities related to crypto-assets such as Bitcoin & Co., there is still considerable leeway for interpretation and uncertainty. The currently applicable definition of ‘virtual currencies' and demarcation issues to financial instruments subject to stricter regulatory regimes are prominent examples of this. As an answer to these issues the new term ‘crypto-asset’, introduced by the upcoming crypto regulation MiCAR, is going to be consistently used in the new anti-money laundering regulation as well as MiCAR, promising more legal clarity for the future. Meanwhile, headlines about the alleged end of ‘(pseudo)anonymity of crypto-assets' due to the new AML rules are already appearing on the European media landscape. This paper provides an overview of the potential implications of these new regulations for businesses, investors and users, as well as seeking to alleviate some of the fears of the market.
Keywords: crypto-asset; AMLD; AMLR; travel rule; MiCAR; virtual currency; pseudonymity
The full article is available to subscribers to the journal.
Author's Biography
Stefan Tomanek is a legal expert in the Department for Prudential Supervision Asset Management, Prospectus, Consumer Information, at the Austrian Financial Market Authority (FMA). While the supervision of undertakings for collective investments in transferable securities (UCITS) and alternative investment funds (AIFs) is the main focus of his work, he is also heavily involved in the area of crypto assets and related business models. In this context, he is also a delegate in international committees as well as The European Securities and Markets Authority (ESMA) committees. Prior to his work at the FMA, he gained valuable experience in the Legal & Compliance Department of a large Austrian bank. He holds a master’s degree in law from the University of Vienna.
Ralph Rirsch is a supervisor at the Austrian FMA in the Department for Integrated Conduct Supervision of Banks. He is specialised in the PRIIPs Regulation (on key information documents for packaged retail and insurance-based investment products) and new technologies. Before his time at the FMA, he worked as a consultant in the Austrian banking sector with a focus on regulatory issues (eg markets in financial instruments directive (MiFID II), payment services directive (PSD2)), large-scale IT implementations and database management. Additionally, he was active as a freelance systemic consultant for small and medium enterprises specialised in group dynamics. His academic background is in law (University of Vienna) and international business administration (Vienna University of Economics and Business).
