Financial Crime World

Biden Administration Unveils Executive Order on Responsible Development of Digital Assets

The Biden administration has taken a significant step towards regulating the rapidly growing cryptocurrency market by signing an Executive Order (EO) on Ensuring Responsible Development of Digital Assets. The EO aims to promote innovation while ensuring that digital assets are developed and used in a way that is safe, secure, and transparent.

Global Crypto Regulations: A Country-by-Country Breakdown

While the US takes its first steps towards regulating cryptocurrencies, other countries have already implemented their own regulations. Here’s a breakdown of some of these regulations:

  • Canada: Cryptocurrency offering providers are treated as issuers of securities, while dealers in virtual currencies must register as money service businesses (MSBs).
  • Europe: The 5th Anti-Money Laundering Directive has brought crypto-to-fiat exchanges and custodial wallets into scope.
  • UK: The government is reviewing economic crime legislation and recognizing stablecoins as a form of payment.
  • Australia: Cryptassets are treated as either financial products regulated by ASIC or consumer products regulated by ACCC.
  • Singapore: Regulates them under the Payment Services Act as “digital payment tokens.”

AML Compliance: A Must for Crypto Firms

As governments around the world continue to map out their regulatory frameworks for cryptocurrencies, firms will soon face an inflection point. Understanding where the AML compliance landscape is now and where it’s likely to go in the months ahead will help firms prepare and build valuable confidence among prospective customers and regulators.

Here are some key takeaways:

  • Firms must invest time and resources in conducting horizon scanning, mapping upcoming regulatory changes to compliance budgets ahead of time, and understanding new requirements and their impact.
  • Staying ahead of AML compliance requires contributing to regulatory consultations and having a dialogue with local regulators.
  • Robust AML programs are crucial, incorporating the latest regulations and guidelines.

Risk of Non-Compliance

Non-compliance with anti-money laundering regulations presents significant risks for crypto firms, including:

  • Facilitating sanctions evasion
  • Enabling terrorist financing
  • Layering

The consequences of non-compliance could include being denied a license to operate, forcing a firm to relocate or close. To avoid these risks, crypto firms must build robust AML programs that incorporate the latest regulations and guidelines.

What’s Next?

In our upcoming guide, we will explore:

  • The major regulatory risks cryptocurrency firms need to be aware of
  • The global regulatory picture
  • Key regulations in major crypto markets
  • Likely developments through 2022

We will also provide a practical guide to building and scaling an AML program for crypto firms.

Download our free guide today and stay ahead of the curve in the rapidly evolving world of cryptocurrencies and digital assets.