Digital currency companies operating in Ireland must now register with the country’s central bank, after new rules mean firms in the sector are required to implement strict anti-money laundering guidelines.
The measures are derived from a domestic implementation of the EU’s Fifth Anti-Money Laundering Directive (AMLD5), which has been transposed onto the Irish statute books with the Criminal Justice Money Laundering and Terrorist Financing Amendment Act of 2021.
Companies considered to be Virtual Asset Service Providers (VASPs) are now required to adhere to the same rules as other regulated financial companies. The measures cover cryptocurrency exchanges, wallets, and other firms dealing in digital currency and digital assets.
Firms that fall within the definition of VASPs now have a period of three months to regularize their status by registering with the Central Bank of Ireland. Effective immediately, there is also a requirement to conduct Know-Your-Customer procedures, such as ID requirements, as well as investigating the origin of funds.
VASPs are also expected to report suspicious financial activities to the authorities, part of the wide array of measures brought in to tackle illicit uses of digital currencies.
Prior to the introduction of the new measures, individuals in Ireland were able to buy and sell digital currency under the cloak of anonymity.
The measures are expected to be the first of many heading down the track for VASPs in Ireland, and equivalent firms elsewhere. Implementation of the following Sixth Anti-Money Laundering Directive is expected by early June, which will require any firms serving EU customers from anywhere in the world to comply with the rigorous new regime.
Firms which fail to adhere to the measures will be liable to significant penalties or in some cases closures, with the authorities given new powers to penalize entities, as well as individuals, falling foul of the rules.
See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers
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