Anti-Money Laundering Initiative in Ireland Extended to Bitcoin

Cryptocurrency buyers and sellers in Ireland, under the new anti-money laundering regime, will not be able to trade their virtual assets by hiding their identity.

The Central Bank of Ireland has warned the financial service companies and crypto exchange companies to perform due diligence on all their clients. They are also mandated to monitor the source of their customer’s assets and where they are transferring them to while keeping in mind the anti-money laundering regulations that other financial service businesses comply with.

This change, effective from April, will remove the anonymity factor from the crypto business and impose new costs on VASPs (Virtual Assets Service Providers). The anonymity factor before did not allow standard checks and balances like normal financial businesses.

Starting from 1st April, VAPs will now have to register for AML (Anti-money Laundering) and CFT (Counter Financing terrorism) with the Central Bank of Ireland ever since the recent AML Directive by European Union has finally landed into Irish law.

Ireland is transposing the EU’s 5th Anti-Money Laundering Directive extending Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements to entities that provide certain services relating to virtual assets. pic.twitter.com/IduiqtAjR3

— Central Bank of Ireland (@centralbank_ie) March 16, 2021

The crypto industry is now required to satisfy the regulators by having a proper system to implement AML and CFT policies and by meeting the regulatory standards in the financial industry. This change will allow the regulators to block senior appointments and take necessary measures against those firms that fail to live up to the regulator’s standards of AML and CFT regulations. 

The industry has previously been popular for being misused and exploited by criminals to fund terrorism activities for some quite some time now. This initiative to transform the crypto industry into the legislative framework is viewed by the legal and compliance bodies as a significant and much-needed step in the establishment of a legal and crime-free cryptocurrency infrastructure for wide acceptance and further use. 

Ireland is known to be slow in the adoption of the new anti-money laundering regulations by the European Union. The governments are quickly moving forward with the implementation of the law. Just last year, the European Court of Justice penalized Ireland with a fine of €2m for failing to comply with the previous AML/CFT.