The Irish Government is tightening the noose on the crypto market by introducing new regulations. The newly introduced law requires crypto firms to register with the Central Bank of Ireland or be charged with a criminal offense.
Crypto businesses in Ireland are now being rattled after the introduction of new laws and regulations in the country. It will be the first time that the crypto market in the country is being regulated. Local firms in the country dealing in virtual assets will now have to comply with the anti-money laundering laws established by the European Union.
The EU 5AMLD Directive
The European Union recently established the 5AMLD directive that requires crypto firms in the region to curb money laundering and terror financing using crypto assets. Ireland added the 5AMLD law in the legislative guidelines on April 23 by introducing the Terrorist Financing Amendment Act of 2021.
The newly introduced act requires companies that deal with crypto assets and other related services to comply with the same regulations that govern other financial institutions in the country. The firms that offer crypto-related services are also known as Virtual Asset Service Providers (VASPs).
VASPs operating in Ireland will now have to register with the Central Bank in three months. During this time, they are expected to carry out due diligence on their customers by authenticating identities, checking the origin of their funds, and how these clients use crypto assets. VASPs will also be required to report any suspicious activity.
Enhancing crypto regulations
Ireland, like many other countries, did not previously have any guidelines that regulated the crypto market. The country upheld the anonymity of the crypto assets. However, this anonymity has proven risky, given that governments have to ensure crypto assets are not being used for money laundering or for financing terrorism.
The European Union has been taking strict measures in regulating the crypto space. The union now requires VASPs that are offering their services to residents of European countries to abide by the requirements of the provided directives.
The European Union has also introduced the sixth Anti Money Laundering directive. The 6AMLD will require VASPs operating in the region to register with authorities in the European Union and adhere to strict reporting rules. These firms are expected to comply with the 6AMLD directive by June 3.
The 6AMLD will be stricter than the 5AMLD, given that authorities will now have the power to issue penalties and fines to non-compliant VASPs. Firms that fail to adhere to the directive may face closure.