Ireland’s Apex Bank Extends AML Guidelines to Cryptocurrency Sector; Stripping Ability to Trade Anonymously
There will be no more anonymous trading for cryptocurrency traders in Ireland as the country ushers in new regulations that would change the crypto landscape.
Cryptocurrency firms now have to register with the central bank and institute anti-money laundering (AML) guidelines or close shop.
Ireland Toughens Crypto Regulation Standards
For the first time, cryptocurrency businesses in Ireland will have to comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) guidelines. This new law brings crypto firms in the same bracket as traditional financial service providers. The anonymity involved in crypto transactions would be reduced as standard checks now have to be done.
Irish crypto platforms are now required to complete due diligence on their customers and account for their funds' origin and destination.
This new requirement goes into effect from April 2021, when the EU's 6th Anti-Money Laundering Directive is included in Irish laws.
Some industry experts are welcoming of the idea. They believe such a move establishes Ireland as a regulated environment for crypto businesses. Josh Hogan, the co-chair of the FinTech & Payments Association of Ireland, explained in an op-ed,
“Ireland has the opportunity to take advantage of its well-earned reputation in both finance and technology to position itself as the leading jurisdiction in which to establish an EU-regulated crypto-services business. This will ultimately bring real commercial benefits in terms of jobs, business revenues, and taxes.”
Ireland's Stance On Cryptocurrencies
Ireland has always been reluctant to adopt new rules that might restrict businesses. While its EU counterparts have introduced numerous laws to regulate cryptocurrencies, Ireland has been slow and unresponsive.
Last July, the European Court of Justice fined Ireland €2 million for failing to implement the previous AML/CFT measures meant to become law in Ireland as far back as 2017.
Ireland's move of setting up the new regulations is a long time coming. The Irish Government had indicated that it would clamp down on cryptocurrencies last year.
This marks a major change for crypto firms and traders in the country who have gotten comfortable with trading anonymously outside specific Irish laws.
Generally, cryptocurrency platforms have been accused of being vulnerable to criminal use and terrorist financing activities for years. The move to bring crypto firms into the wider financial regulatory framework is seen by Irish legal and compliance sources as a necessary step in developing a legitimate cryptocurrency infrastructure for more widespread use and acceptance.
Ireland joins South Korea in its bid to regulate the crypto sector. Just last week, South Korean regulators amended their financial regulatory AML rules to include the crypto sector. This new guideline would require regular reporting of all crypto transactions. Failure to comply would result in stiff penalties.