Financial Crime World

Finland’s Finance Ministry Cracks Down on Cryptocurrency Money Laundering with Proposed Legislation

The Finnish Finance Ministry announced plans to bring cryptocurrency transactions under the same regulatory framework as traditional currency trades, aiming to combat money laundering and organized crime activities associated with digital currencies. This push for increased oversight aligns with impending European Union (EU) regulations.

EU Regulations Targeting Virtual Currencies

The European Parliament and the European Council passed decisions in December 2020 to tackle the anonymity of virtual currencies and combat tax evasion, money laundering, and other criminal activities. Finland’s Finance Ministry’s legislative advisor, Armi Taipale, explained that this proposed legislative change will create new responsibilities for banks and insurance companies, requiring them to report all cryptocurrency dealings to the authorities.

Future Regulations for Cryptocurrency Exchange Platforms

Virtual currencies such as Bitcoin currently provide customers with anonymity. This legislative reform, as stated by Taipale, aims to:

  1. Bring transactions out into the open
  2. Subject future cryptocurrency exchange platforms to similar regulations

International Regulations on Cryptocurrencies

The need for stricter international regulations regarding the use of cryptocurrencies has gained global attention. Countries like Germany and France have recently announced plans to propose bitcoin regulations at the G20 meeting of finance ministers in March.

Consumer Protection and Investor Protection Concerns

Key concerns surrounding cryptocurrencies include consumer protection and ensuring transactions take place as promised. Taipale emphasizes that:

  1. At present, there is no customer protection for bitcoin transactions.
  2. The legislative proposal takes a strong investor protection standpoint.

EU Money Laundering Directive and Implementation

The EU is expected to release the latest version of its money laundering directive in May or June. Member States will be given between 12 and 18 months to implement it. Finland’s Finance Ministry plans to introduce its proposal to parliament for consideration by September-October.

Additionally, the EU directive will outline guidelines for creating a unified bank and payment account register within the union.