A study of the European Central Bank determined that current regulations are outdated to determine crimes of money laundering and terrorist financing with cryptocurrencies.

Some parliamentarians from the European Union (EU) call to stop the ambiguities in the regulations of crypto assets. For this reason, they suggest creating universal standards that oversee the use of cryptocurrencies in all territories.

This would be an action that would eliminate loopholes in regulatory statutes in various countries. For this reason, the European Parliament committee proposes the universal regulatory framework for digital currencies and hopes that these measures can avoid unfavorable legal changes in some countries. The European Parliament will not allow the creation of positive conditions to use cryptocurrencies in crimes such as money laundering and corruption.

Some countries have made significant efforts to regulate and control the use of cryptocurrencies in their territories. However, they have not achieved an alliance to coordinate efforts against crimes with cryptocurrencies.

The individual measures to control these assets only cover a part of the entire crypto ecosystem. Thus, the Committee on Economic and Monetary Affairs of the European Central Bank (ECB) conducted a study and determined that the entire ecosystem is not affected.

In this sense, the study determined that it is important to establish a regulatory framework for cryptocurrencies for all the countries of the European Union (EU). In this way, the countries would prevent the so-called “regulatory arbitration”, which could promote legal loopholes and financial problems, among other issues.

An example of this can occur within the fight against money laundering and terrorist financing. This is because those who conduct these acts of corruption can take advantage of the different regulations in the countries to avoid sanctions or criminal convictions.

The study diligently evaluates different possibilities. If the United States of America strengthens legal measures to prevent illegal activities, they will likely change the way they operate and move to some countries in Europe. In this way, if the EU establishes a clear regulation for all its member countries, “the possibilities of effectively eradicating such activities are much greater”.

Although the study indicates cooperation between the EU and the Financial Action Task Force (FATF) to conduct actions that go against these illegal activities, the study indicates that the European Union is far behind in terms of anti-money laundering laws.

Binance also recognized that by the time the European countries established the international laws for cryptocurrencies of the AMLD5 it in their laws, they were already outdated.

For this reason, the reforms that these countries made to these laws are beneficial, but they are insufficient for the new times.

Although this group only results to be a request for evaluation, some actions of the European Parliament suggest that they close and evaluate the use of cryptocurrencies.

An example of this took place in December 2019. That year, the European Committee launched a public consultation on cryptocurrencies and their regulations. This consultation would also assess the role of these assets in the global payments and transactions market.

By María Rodríguez


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