In a press release on May 31, The European Banking Authority (EBA) has called a public consultation to modify the rules on money laundering and financing of terrorism due to the incipient use of cryptoactive service processors under the protection of the new law.
The effect of the approval of the Mica law in Europe is beginning its first moves. One of the rhetoric used by those who belong to the traditional financial system ensures that crypto assets are used for money laundering, financing of terrorism and criminal acts, thanks to their anonymity.
In this sense, the EBA has started a new campaign in which it intends to modify the guidelines on these issues so that crypto asset service providers (CASPs) can conform to current regulations and avoid being used for criminal acts.
The statement indicates that CASPs, as well as other financial and credit institutions, are exposed to many risks of being used for money laundering and terrorist financingand that these risks can be increased with the “use of innovative technologies, instant transfers of crypto assets around the world, and services that contain privacy-enhancing features”.
That is why the EBA proposes to amend its “ML/TF Risk Factor Guidelines” to establish common regulatory expectations for the steps CASPs should take to effectively identify and mitigate these risks.
Review the press release that: “The amendments introduce new sector-specific guidance for CASPs, which highlights factors that may indicate a CASP’s exposure to higher or lower ML/TF risk. CASPs should consider these factors when conducting ML/TF risk assessments of their businesses and customers early on and throughout the business relationship. The Guidelines also explain how they should adjust their customer due diligence (CDD) according to those risks. In addition, the amendments include guidance to other credit and financial institutions on the risks to consider when entering into a business relationship with a CASP or when exposed to crypto assets.”.
The statement states that Comments on the document can be sent until August 31, 2023. Subsequentlythe EBA will hold a virtual public hearing on the document consultation, and all contributions received will be published after the end of the consultation.
Possible effects on the ecosystem
The new anti-money laundering rules of the European Union (EU) could have an impact on Uniswap, Binance and Monero, For example. The EU has proposed stricter legislation to address the use of cryptocurrencies in illegal activities, such as money laundering and terrorist financing.
These regulations would require cryptocurrency service providers implement more rigorous controls and carry out identity verifications more exhaustive.
uniswapa decentralized exchange platform, could be affected by these new rules, as it might have difficulty meeting user identification requirements.
Binanceone of the largest cryptocurrency exchanges in the world, could also face challenges as it would have to strengthen its anti-money laundering measures and increase the transparency of transactions.
Furthermore, the cryptocurrency Monero, known for its focus on privacy and anonymity, could face obstacles due to the proposed regulations. The EU seeks to limit the use of cryptocurrencies that make it difficult to identify users and track transactions, which could affect Monero and other similar cryptocurrencies.
In general, these new rules of the European Union seek to establish a stricter framework for the use of cryptocurrencies and protect the financial system from illegal activities. However, its implementation could have significant implications for exchanges like Uniswap, Binance, and privacy-focused cryptocurrencies like Monero just to name a few of the effects.
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