EU Paves the Way for Crypto Regulation in UK

EU Flag in official aml and compliance design deck

The EU has this week (31 May 2023) signed into law its landmark Markets in Crypto Assets (MiCA) regulations which will govern the issuance and provision of services relating to crypto assets and stablecoins, according to a report by cryptocurrency specialist media outlet CoinDesk.

The law was signed by the European Parliament President Roberta Metsola and Swedish Rural Affairs Minister Peter Kullgren and announced over Twitter by the Swedish government.

It had been expected that MiCA would come into force at the end of 2023, though it is now likely to be brought forward and will be implemented in the next few weeks following publication in the EU’s official journal.

Under the new regulatory framework, crypto asset service providers will need to be authorised to operate in the EU, while stablecoin providers will need to maintain sufficient reserves. Crypto industry players must also give information on their environmental and climate footprint.  

The new rules will apply to crypto-asset issuers and service providers in the EU.

MiCA was introduced alongside a separate anti-money laundering law that requires crypto providers to verify their customers’ identity when they transfer funds, according to CoinDesk’s report.

The move takes the EU closer to becoming the first major jurisdiction in the world with tailored rules for the cryptocurrency sector.

However, the UK will likely follow suit and introduce new legislation governing the use of crypto assets to regulate the sector.

In February this year, the UK Treasury launched a consultation into crypto assets to “create the conditions for crypto asset service providers to operate and grow in the UK whilst managing potential consumer and stability risks”. The consultation closed at the end of April.

To read more about MiCA and its likely impact, please click here.

Increased regulation of the digital asset sector comes as governments attempt to make it more difficult for criminals to circumvent anti-money laundering rules via cryptocurrencies.

Managing Risk Exposure 

Part of the Anti-Money Laundering (AML) Regulations requires a business to undertake a formal risk assessment. The predominant purpose of this is to identify, manage and, where possible, eradicate the potential for the business to be caught up in money laundering, and cryptocurrency considerations form part of this.

Regardless of the size of your business and the complexity of your structure, a risk assessment must be performed. At AML & Compliance, we can support you with this and work with businesses of all sizes and across all sectors and multi jurisdictions.

A risk assessment provides valuable insight into a business when performed correctly. Along with an overview of risk, these crucial assessments also highlight issues within the business, so it is essential to undertake a risk assessment properly. The many aspects that form a company’s building blocks need to be considered, such as its staff, clients, operations, and finances.

By working with AML & Compliance, a business can be assured that we will bring the required level of knowledge and expertise needed to perform a risk assessment which has value to the business and is not simply a box-ticking exercise. Our team can also provide a full range of services that include:

Our services focus on businesses’ Anti Money Laundering and Regulator requirements through the implementation of effective policies, procedures, training, and consultancy.

Get In Touch with Our Compliance Specialists

To enquire about our risk assessment services and how AML & Compliance can work with your business, call us on 0203 985 8553, email us or complete an enquiry form. Click here for more information about our services.

Call us on 0203 985 8553 or click here for more information about our services.