The European Banking Authority (EBA) has advised the European Commission to found a regulatory regime specific to virtual currencies such equally bitcoin. Commenting on the commission’s proposal to improve the existing European anti-money laundering directive, the EBA expresses the see that, inwards the long term, oversight of digital currencies should non autumn nether regular anti-money laundering provisions, but rather nether a specialized European Union body.
In a response to the commission published past times the EBA lastly month, the banking potency suggests that the existing anti-money laundering directive is “currently non suitable for mitigating all the risks arising from [virtual currency] transactions. Instead, a dissever regulatory regime, or to a greater extent than far-reaching amendments [...] would live required.”
Impact on Bitcoin Addresses in addition to Miners
In July 2016, the European Commission published a draft directive, proposing to extend strict anti-money laundering (AML) regulations in addition to “countering the financing of terrorism” (CFT) measures to Bitcoin service providers. Specifically, the directive would apply to virtual currency central services in addition to custodial wallet providers.
The draft directive also hinted that farther rule may live required inwards the time to come to maybe include Bitcoin address-ownership. The EBA’s reply indicates understanding amongst that assessment in addition to suggests that mining should live dependent champaign to oversight equally well, stating:
“[Virtual currencies] incur additional, technology-specific risks that brand them distinct from conventional fiat currencies that are inwards the orbit of [the existing anti-money laundering directive]. So-called ‘51 per centum attacks,’ for example, are i such risk, [constituting] a scenario inwards which a puddle of miners attains 51 per centum of the computational ability amongst which units of a especial [virtual currency] system are mined, which inwards plough allows that puddle to block transactions.”
The banking potency hence says that an amendment to the electrical flow anti-money laundering directive may non suffice inwards the longer term. It argues inwards favor of the installment of a special regulatory trunk for virtual currencies inwards the future.
EU Directive
Even though the EBA advises that the committee should found a regulatory regime specific to virtual currencies, it does by in addition to large back upward the proposed amendment to the existing anti-money laundering directive. As the institution of a novel regulatory regime would direct maintain a pregnant sum of time, the amendment proposal serves equally a skilful intermediary step.
“Such a regulatory regime […] would require several years to develop, consult, finalise in addition to transpose, in addition to is hence non an option, given the brusk fourth dimension frame inside which the Commission was asked to railroad train its proposals,” writes the EBA. “It may hence live advisable for the Commission in addition to co-legislators to initiate equally shortly equally possible the comprehensive analysis that is needed for assessing which, if any, regulatory regime would live most suitable for [virtual currency] transactions.”
The EBA does, however, suggest that the draft directive requires only about refinement. In particular, the banking potency points out that both the European government equally good equally digital currency companies operating inwards Europe should live well-prepared to bargain amongst novel legislation. This mightiness require only about additional fourth dimension earlier the novel directive tin sack applied.
According to the EBA:
“[I]n social club for these amendments to cut back the gamble of virtual currencies existence abused for money laundering or terrorist financing purposes, the Commission in addition to co-legislators should ensure that competent government direct maintain the appropriate tools at their disposal to ensure the effective supervision of [custodial wallet providers’] in addition to [virtual currency central platforms’] compliance amongst their AML/CFT obligations.”
The novel directive is scheduled to live enforced past times Jan 1, 2017, but the EBA believes that June 26, 2017, would live a to a greater extent than realistic goal.
Sharing Data
The EBA is also concerned most the international qualities of virtual currencies such equally bitcoin.
An European Union directive is itself non a law, but rather serves equally a guideline for private fellow member states to draft national laws. This agency that the resulting laws inwards whatsoever i fellow member dry reason may differ slightly from the others.
And since digital currencies alive on the internet, in addition to most service providers — similar digital currency exchanges in addition to custodial wallet providers — furnish their services on the mesh equally well, dry reason laws are easily circumvented, the EBA warns.
The EBA hence recommends that dissimilar European fellow member states volition demand to move closely together, noting that the risks tin sack live tackled inside all of the political spousal human relationship solely if the relevant agencies inwards the dissimilar countries cooperate.
According to the EBA:
“It is [...] essential that competent government from dissimilar fellow member states are able to liaise in addition to central data inwards relation to the functioning of [virtual currency central platforms] in addition to [custodial wallet providers] on their territory. […] The EBA hence considers that the European Union Commission in addition to co-legislators should hence innovate farther amendments [...] to ensure that competent government responsible for the AML/CFT supervision [...] direct maintain gateways inwards house to central relevant data amongst i another.”
For specific details in addition to to a greater extent than recommendations past times the EBA on the European Union directive draft proposal, read the full opinionas published past times the banking authority.
The post European Banking Authority Proposes Virtual Currency-Specific Regulatory Body appeared start on Bitcoin Magazine.
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