[Newsflash n. 43]

There are currently more than 1100 crypto currencies trading in the financial market. Many governments feel crypto currency use would result in the loss of economic power and shift towards decentralisation of economies globally. As a result, particularly the US and the EU are beginning to debate and implement regulation around the activity of crypto currency.

Two major concerns arising out of the debates currently active in government discussions around the operation of crypto currency are as follows:

  • AML & Tax Evasion

The EU Governments and the UK are cracking down on the regulation of crypto currency due to growing concerns in relation to the use of digital currency for money laundering and tax evasion.

The Treasury plans to regulate crypto currencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.

Under the EU-wide plan, online platforms where crypto currency is traded will be required to carry out due diligence on customers and report suspicious transactions. The UK government is negotiating amendments to the anti-money-laundering directive to ensure visibility of firms’ activities by national authorities. These rules are expected to be released for implementation planning and come into force during the course of 2018.

The Italian Ministry of Economy and Finance have launched a public consultation introducing notification requirements for the providers of crypto currency. The Decree will be the first step towards the implementation of the EU Directive 2015/849 (on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing) and the EU Regulation 2015/847 (on information accompanying transfer of funds), transposed in Italy by the Legislative Decree n. 90 of 25 May 2017.

  • Crypto Currency considered an investment product?

Regulators in the US have expressed that investing money in a token with the expectation of the profit derived from managerial efforts from other people points to crypto-currency being considered a Security and should be regulated as such by the US Securities and Exchange Commission (SEC).

The SEC has carried out a full investigative report and the landscape of the regulation is in discussions and mapping phase.


Marina Mirabella

Angelena Wouhra