Ireland on Friday has mandated the registration of all virtual asset services providers (VASPs) with the country’s central bank to ensure compliance with the anti-money laundering and countering the financing of terrorism (AML/CFT) obligations.
The new rules on the crypto industry have been enforced as the country transposed the European Union’s Fifth Anti-Money Laundering Directive (5AMLD) into local laws, which came into force on April 23.
Looking Forward to Meeting You at iFX EXPO Dubai May 2021 – Making It Happen!
The Irish central bank defines VASPs as any company which facilitates exchange between crypto and fiat or two cryptos, transfer of virtual assets, custodian services and participation in financial services related to an issuer’s offer or sale of a virtual asset.
In general, companies providing any kind of services with crypto dealings can be categorized as VASPs. All such companies operating in Ireland have three months to register themselves with the central bank.
In addition, the rule will require foreign crypto companies offering services to Irish citizens to register.
The central bank will assess the effectiveness of these companies’ AML/CFT policies and procedures in combating the money laundering and terrorist financing (ML/TF) risks. Furthermore, the firms’ management and beneficial owners have to pass a credibility test.
“It is important to note that it is a criminal offense not to comply with the obligations set out under Part 4 of the CJA 2010 to 2021 and that a failure to do so may result in a fine, imprisonment, or both,” the Irish regulator warned.
Killing the Crypto Anonymity
The 5AMLD rules require financial services companies to carry out mandatory ML/TF risk assessment, customer due diligence, monitoring of transactions, flagging and reporting suspicious transactions and retention of records among others.
Countries like the Netherlands and few others have already enforced laws based on the 5AMLD framework, which saw an exodus of crypto companies to offshore countries. Many from the crypto industry argue that these rules will effectively kill the anonymity associated with cryptocurrency transactions.