Regulations in the development of the crypto ecosystem

On the 19th of June 2018,  the Fifth Anti-Money Laundering Directive (“MLD5”) was published in the European Union’s Official Journal. The MLD5 brings now virtual currency service activities within the scope of the EU anti-money laundering and terrorist financing regulations (AML/CTF). It applies to providers engaged in exchange services between virtual and fiat currencies (like Euro) and custodian wallet providers, which will be subject to the new registration requirements under the Directive.

A clear distinction has been made between custodian wallet providers and software wallet providers. A custodian wallet provider provides services to securely save private cryptographic keys on behalf of its customers, to store and transfer virtual currencies. Companies which offer wallet application and have no access to their customers private keys are not in the scope of the MLD5. EU Member States have until the 10th of January 2020 to implement this new Directive into their national legislation.

For some bodies like the Financial Action Task Force (FATF), new risks are not directly covered by the MLD5. The FATF has already made some recommendations in October 2018 to complete the definition of “virtual assets” and “virtual asset service providers” – such as exchanges, certain types of wallet providers, and providers of financial services for Initial Coin Offerings (ICOs). The European Banking Authority (EBA) has also recommended in January 2019 that the European Commission have regard to the latest FATF recommendations and any further standards or guidance issued by the FATF.

At Scorechain, we have always believed that the development of clear and smart regulations rules will help the development of this new crypto ecosystem. Today, we offer advanced solutions for transaction tracking, detection of the addresses of a wallet (clusterization), reporting and real-time monitoring.

Scorechain Bitcoin & Ethereum Analytics platforms

We are continuously maintaining black and white lists of services and we are following millions of addresses for Bitcoin and Ethereum providing useful information for AML. As we cover ERC20 tokens as well, we can also help ICOs and STOs to identify the origin of funds sent by their investors and thus help them to comply with the new regulations, for instance, the new ICO label from the Autorité des Marchés Financiers (AMF) in France.

Working closely with our customers and having regular discussions with the regulators lead us to new developments and facilitate the implementation of the new rules for our users. In order to complete the services we offer, in the coming weeks, we will launch new services for two other cryptocurrencies: Litecoin and Bitcoin Cash, new assets should follow in the near future as well. We try to provide the best products for companies who are looking for an AML solution to agree with regulation.

For more information, welcome to contact us!

References:

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/regulation-virtual-assets.html

https://eba.europa.eu/documents/10180/2545547/EBA+Report+on+crypto+assets.pdf

( Image1 & Image3 are from Envato)