Spain to Impose Registration for Crypto Businesses Under AMLD5 Rules

Under AMLD5, crypto exchanges and custodian wallet providers will be brought within the scope of anti-money laundering rules

Spain is reportedly set to approve new measures to modify its money laundering legislation in order to comply with the EU’s Fifth Money Laundering Directive (AMLD 5). Spanish parliament is slated to vote on the updated regulations in the second half of 2020, which would the allow the central bank to police the nation’s crypto providers.

Once the draft bill approved, that would force crypto exchanges, wallet providers and crypto custodial service providers operating in Spain to register with a financial regulator and prove that they are meeting AML requirements if they want to continue their operations.

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The AMLD5 rules, which went into effect in January 2020, is a pan-European anti-money laundering directive that requires member states to implement it into their national laws. The legislation is notable because it represents the EU’s first attempt to regulate cryptocurrency activities at EU-level expressly.

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Under AMLD5, crypto exchanges and custodian wallet providers will be brought within the scope of EU anti-money laundering rules for the first time. The law imposes registration and customer due to diligence requirements that force operators to disclose their traders’ identities and report suspicious activity.

The Spanish regulator started the cryptocurrency saga more than two years ago but they mostly focused on pursuing illicit operations. So far, Spain does not have specific legislation governing cryptocurrencies. The country’s regulators only tried to provide a definition of the virtual assets exclusively for the purpose of AML laws. The current legal framework does not contain a normative definition of cryptocurrencies. Interestingly, however, the central bank and CNMV’s statements described concepts such as initial coin offerings and distinguish between security tokens and those classified as a utility.

Meanwhile, the CNMV follows in the footsteps of other European regulators that frequently issue a series of warnings against companies engaged in schemes to promote cryptocurrency mining and investments. The watchdog’s warnings often lack technical specifications for such products and use Spanish terms that are easy to understand and accessible to the general public.

As it stands, the current shifting regulatory landscape for cryptocurrencies across the globe is still very confusing as local regulators are struggling to keep pace with the innovations in the space.

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