Europe to Trust New Anti-Money Laundering Body to Oversee Crypto
The European Union is reportedly planning to entrust its new money laundering watchdog with overseeing crypto businesses.
The European Commission is overseeing the application and powers of a new financial watchdog that should be fully operational by 2026, Bloomberg first reported. A bloc of member states, led by Germany, is seeking to make the inclusion of cryptocurrency firms more explicit in its remit, an EU diplomat has learned.
The bloc of states, which includes Spain, Austria, Italy, Luxembourg and the Netherlands, wants the new watchdog to monitor risky cross-border money transfers, the diplomat told Bloomberg . The latest set of Commission proposals contains only a vague reference to “virtual assets”.
Calls for tougher crypto regulation come after an explosion of interest in the crypto space in 2021 that saw the digital asset industry reach a global market capitalization of $2.6 billion ($1.9 billion). pounds sterling). Growing volumes of crypto transactions have created new avenues for criminal activity, with illicit transactions jumping 80% to $14 billion in 2021, according to Chainalysis.
While the proportion of total crypto transactions associated with illicit activity has declined, law enforcement and regulators are still struggling to keep abreast of rapidly changing digital asset technology.
Last week, the UK tax authority seized three NFTs and opened 20 investigations involving digital assets, a sign that crypto is being used for tax avoidance and fraud.
Read more: Letters: Regulations are needed to stop crypto fraud