Monaco’s Stance on Cryptocurrency Anti-Money Laundering Regulations: A Tale of Evolving Financial Sector

In a recent interview, Magali Vercesi, Secretary General of the Financial Activities Control Commissions in Monaco, provided insight into the country’s stance on cryptocurrency anti-money laundering regulations. As the financial sector continues to evolve, particularly with the rise of management companies and family offices, regulators are faced with the challenge of navigating this new landscape.

Regulatory Challenges

According to Vercesi, multi-family offices (MFOs) that do not provide financial advice are exempt from authorization under financial activities Law 1318, leaving little room for regulatory intervention. In contrast, banks and management companies must comply with strict regulations, with around 50% of applications for authorisation being approved.

Cryptocurrency Concerns

When it comes to cryptocurrency and Initial Coin Offerings (ICOs), Vercesi expressed concerns about the lack of regulation in this burgeoning industry. “We are reaching the limits of a system initially created to avoid any regulation,” she warned. As the use of crypto currency becomes increasingly widespread, the need for guarantees and security will only continue to grow.

Monaco’s Position

The Financial Activities Control Commissions is currently grappling with how to position itself in this rapidly evolving landscape. Regulating cryptocurrency would require introducing new laws and texts, but the industry’s lack of maturity makes it difficult to do so. The real question remains: when will the market reach maturity?

Comparing Approaches

Meanwhile, other financial centers are taking different approaches to regulating cryptocurrency. Hong Kong has no regulations in place, relying on best practices for compliance. Japan, on the other hand, accepts crypto currency payments, while Switzerland is working to establish regulation driven by policy quotas.

Uncertainties Ahead

As the industry continues to evolve, questions remain about the legal status of tokens, tax implications, and anti-money laundering regulations. Banks are hesitant to accept funds from exchange platforms due to concerns over Know Your Customer (KYC) procedures. Some banks are considering including tokens in customers’ securities portfolios, but this will depend on how anti-money laundering regulations unfold.

Conclusion

Vercesi concluded that good timing is paramount when it comes to regulation: “Regulation is necessary, but not at the expense of interesting and innovative projects.” As 2018 unfolds, it remains to be seen how Monaco’s stance on cryptocurrency anti-money laundering regulations will shape the future of this rapidly evolving industry.