EU Officials: Crypto Exchanges Could Lose Licenses for AML Breaches

Cryptocurrency exchanges that commit serious breaches of anti-money laundering (AML) rules should lose their licenses, a group of EU financial officials said Wednesday (June 1).

This recommendation — made by European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) — comes on the advent of the proposed Markets in Crypto-Assets Regulation (MiCA), which is now being negotiated.

The report says authorities that have the power to register and authorize crypto exchanges and wallet providers must “be empowered to withdraw the authorization/registration for serious breaches of AML/CFT [anti-money laundering and terrorist finance] rules.”

However, the report notes that the decision to revoke licenses should be considered only as a last resort, said the ESAs, which oversee banks, securities, and insurers in Europe.

The report comes as regulators around the world call for stricter oversight on crypto, especially in light of last month’s stablecoin collapse.

Read more: UK Government Wants Bank of England to Manage Collapsing Stablecoins

As PYMNTS reported Wednesday, the government of the U.K. has proposed a new regime in which the Bank of England would take over management of the collapse of a stablecoin that has importance to the financial system, a job now handled by the Financial Conduct Authority.

And last month, European Central Bank President Christine Lagarde said regulators should pass new rules to make sure people are less likely to speculate on cryptocurrencies using their life savings. She said she worries about people losing their money when they have “no understanding of the risks” and has said she’s skeptical of the value of the digital tokens.

See also: Crypto Is ‘Worth Nothing,’ Lagarde Declares, and Should Be Regulated

“It is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety,” she said.

Lagarde contrasted it with the potential launch of her bank’s digital euro, which could arrive in the next few years.

“The day when we have the central bank digital currency out, any digital euro, I will guarantee — so the central bank will be behind it and I think it’s vastly different than many of those things,” Lagarde said.