As much as the crypto industry is fixated on MiCA and Transfer of Funds regulation, there is another section of the EU AML comprehensive package that will have far-reaching effects on banks. There is currently a possibility that the EU will establish a dedicated anti-money laundering regulator for the cryptocurrency industry.
EU Institutions to Discuss AMLD6
At the same time that the European Commission released its proposal for the 6th Directive AMLD6, the European Council did the same thing. Upon returning from their current break, members of the European Parliament (EP) will deliberate on both proposals.
Trilogue negotiations will be held between the three agencies after the European Parliament has released its version. The establishment of an EU AML regulator is a crucial part of the new law (Anti-Money Laundering).
While the three groups would negotiate, it’s likely that they would all agree that a watchdog needs to be established. Additionally, it would be responsible for monitoring the EU’s crypto industry.
Up until this point, the European Parliament has been the more forceful in its pursuit of crypto regulation. Therefore, the agency might not object to delegating authority to regulate cryptocurrencies to the forthcoming agency.
Anti-Money Laundering Authority (AMLA) is the proposed watchdog that will monitor potentially illicit cryptocurrency exchanges. This is in accordance with the law as interpreted by the European Commission and the European Council.
In a parliamentary meeting reported by The Block, the new organization was defined as follows:
The supervision system would be set up like a spoke model with a central hub on the continental level. Most financial institutions would fall under its direct supervision. Further, it would wield indirect power over both the financial and non-financial sectors.
European Union Officials Are Trying To Create A Standardized Cryptocurrency Regulatory Environment
The EU would benefit greatly from establishing such an agency. Directives four and five of the Anti-Money Laundering Regulations (AML) issued in 2015 and updated in 2018 establish minimum requirements for member countries to gather and make public specific types of information. One of these concerns the people who actually own companies.
Such registers are a wonderful illustration of the various ways in which the rules have been followed. Even among states that allow unrestricted access to business data, there is a wide range of available resources.
It is a requirement of AMLD5 that cryptocurrency exchanges be treated like banks. While the responsibility lay with the international community, it was ultimately up to the individual nations to implement. Despite the EU organizations’ access to legal remedies, mandatory public disclosure has not led to the formation of a unified body.
An attorney who participated in AMLD4 negotiations, Tomasz Krawczyk, claims that the EU’s Court of Justice will hear cases against any member nation that does not enforce the law as intended. That’s why the European Union is working to standardize regulations across member states.
The adoption schedule is contingent upon the EP’s deliberations and the subsequent trilogues. The rule’s implementation could take a very long time. Staffing the AMLA would also be a time-consuming process.