EU Crypto Regulation

Welcome back to the Tribe! In this post we dive into the EU Crypto Regulation news, touch on some related news from Brazil, and mention some metaverse updates!

Nothing should be considered investment or financial advice. Enjoy the ride!

Some members of the European Union are reportedly agitating for the bloc’s new watchdog to have clearer oversight regarding dirty money rules. These member states insist cryptocurrency firms must fall under the purview of the organization’s latest regulatory body as well.

New EU Body to Regulate Crypto Firms

Bloomberg reported that Europe’s top organization, the European Union (EU), has announced plans to establish a new regulatory authority focused on implementing strict anti-money laundering (AML). The agency is set to kick off operations in 2024 and officials within the commission expect full functional regulations by 2026.

According to the report published on Wednesday (February 22, 2022), the decision to build a new agency is linked with concerns pertaining to scandals involving illegal funds and transactions in recent years.

Over the last decade, EU policies regarding AML practices have been underpinned by loopholes and grey areas. These factors have reportedly allowed illicit actors in Europe to conduct shady deals through traditional financial institutions. Service providers like Deutsche Bank AG and other traditional fiat houses have been accused of implementing inadequate AML measures.

With the emergence of cryptocurrencies and digital assets in recent years, Eu authorities are now concerned that criminals might launder money through crypto firms and platforms if the industry remains unregulated, per the report.

Although illegal funds accounted for a small share of all virtual asset transactions and crypto volume in 2021, data from blockchain analytics outfit Chainalysis still shows that illicit activity through virtual assets skyrocketed to$14 billion last year.

Regulation For Firms

Following the announcement of the EU’s new AML agency, officials within the commission want oversight for cryptocurrency firms and digital assets in Europe added to the body’s responsibilities. A German-led group of member states highlighted risks associated with some vague policies in the EU’s proposed regulations which were published back in July 2021.

The German-led group made up of Spain, Austria, Italy, Luxembourg and The Netherlands proposed that the watchdog’s mandate must include financial service providers like banks, crypto exchanges and platforms that offer cross-border payment facilities.

Leading EU legislator Luis Garicano commented on his support for the proposal and said that the bill has the potential to negate the current limitations around international efforts to monitor unusual transactions. Garicano added that:

“It is key that the scope of the new EU authority explicitly includes crypto-assets, given that this is one of the fields more prone to money laundering activities.”

As the proposed legislation has not been tabled before all EU member states and formally passed as a policy, it remains unclear what regulatory practices could be adopted by the organization’s new AML authority.

Related news: Brazil Close to Standardized Crypto Regulations

The Economic Affairs committee within the Brazilian senate has approved a bill to regulate the cryptocurrency industry within the country. According to reports, the proposal seeks to establish international-standard policies geared towards combating money laundering activities and ensuring that crypto-related businesses adhered to laid down financial laws.

Although the bill has been okayed by the senate, Brazil’s president must give the green light before the policies are officially implemented on a national level.

Metaverse Gist: Splinterlands and Warner Music Group Partner for Web3-powered Gaming

Entertainment behemoth Warner Music Group announced a partnership with blockchain-based game house Splinterlands.

Details of the partnership revealed plans to develop arcade-style games for mobile platforms by leveraging decentralized technology and providing digital collectables for players via NFTs.