Financial Crime World

MONACO ADOPTS DRAFT LAW TO REGULATE CRYPTOCURRENCY ANTI-MONEY LAUNDERING AND TERRORIST FINANCING

The Principality of Monaco has taken a significant step towards modernizing its financial regulations by introducing Draft Law No. 995, which aims to regulate blockchain technology and Initial Coin Offerings (ICOs) in the country.

Background

Monaco’s draft law is part of the country’s ongoing process of digital transition and modernization. The law builds upon the spirit of Draft Law No. 237 adopted in December 2017, which aimed to accompany the rise of blockchain technology.

Key Provisions

  • ICO Regulation: ICOs will be subject to anti-money laundering (AML) and terrorist financing (TF) compliance requirements, mirroring the country’s existing AML/TF laws.
  • Conversion Platforms: Conversion platforms that exchange cryptocurrencies for legal currency will also be covered by these regulations.
  • Investor Protection: The draft law aims to provide investors with quality information and promote the development of companies in the blockchain sector. It also seeks to protect investors who may participate in ICOs launched by companies based in Monaco.

Regulatory Framework

The draft law consists of six chapters, covering:

Definitions

  • Regulation of blockchain technology and Initial Coin Offerings (ICOs)
  • Anti-money laundering (AML) and terrorist financing (TF) compliance requirements

Regime and Evidence

  • Conditions for the issuance of payment service provider licenses to conversion platforms
  • Requirements for coin offerings

Coin Offerings

  • Supervisory and regularity requirements for coin offerings
  • Penalties for non-compliance with regulations

Penalties

  • Administrative and criminal penalties for non-compliance with regulations

Miscellaneous and Transitional Provisions

  • Provisions for the implementation of the draft law

Implementation

The Autorité de Contrôle Prudentiel et de Résolution (ACPR) will be responsible for issuing payment service provider licenses to conversion platforms.

Conclusion

Monaco’s adoption of this draft law is seen as a significant step towards establishing itself as a reputable player in the global blockchain industry, while also ensuring the protection of investors and the integrity of its financial system.