Monaco Cracks Down on Cryptocurrency Anti-Money Laundering Regulations
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The Commission de Contrôle des Activités Financières (CCAF) has issued a stern warning to investors and financial institutions operating in Monaco regarding the lack of regulation surrounding cryptocurrency anti-money laundering (AML) regulations.
Regulatory Requirements
According to the CCAF, direct marketing of financial products by non-authorized companies is strictly prohibited in the principality. Any institution looking to market financial products must be duly licensed by the CCAF and list their authorization on the official website.
Licensing Requirements
Performing a financial activity in Monaco requires both an administrative authorization delivered by the Government and a license issued by the CCAF, as outlined in the Law 1.144 of July 26th, 1991, and Law 1.338 of September 7th, 2007.
Unregistered Companies
The CCAF has also sounded the alarm on several companies operating in Monaco, including:
- Monaco Investment Corporation
- GB Finanx
- Barclays Traders
These companies are not authorized to offer their services/products to private customers in the principality. Investors are advised to exercise extreme caution when considering investments from these companies.
Initial Coin Offerings (ICOs)
In a separate warning, the CCAF cautioned investors against investing in ICOs, stating that these public offerings do not benefit from specific regulations and come with significant risks, including:
- Complete loss of invested funds
- Lack of liquidity
- Volatility risk
- Theft or fraud
Investor Protection
To protect themselves, investors are advised to exercise extreme prudence when considering investments in crypto-assets. The CCAF recommends ensuring the seriousness of the ICO organizer, understanding the functioning of crypto-assets, assessing the risk, ensuring security related to assets under custody, and evaluating the liquidity of these assets.
Regulatory Efforts
The CCAF’s efforts to regulate the cryptocurrency industry come as part of a broader push to combat money laundering and terrorist financing in Monaco. The principality has established itself as a major hub for financial services, with a reputation for strict AML regulations.
Investor Alert
Investors are advised to exercise caution when considering investments in crypto-assets or engaging with companies offering these products. Failure to comply with the CCAF’s regulations can result in administrative and/or criminal sanctions.
By understanding the regulatory requirements and taking necessary precautions, investors can protect themselves from the risks associated with cryptocurrency investments in Monaco.