Amid war, bitcoin and other cryptos are in the crosshairs.
As Russia rolls into Ukraine, European regulators are pushing for more stringent guardrails in place for cryptocurrencies that would in turn make it harder for Russia to work around the sanctions that are being lobbed by Western nations.
As reported by Bloomberg Friday (Feb. 25), European Central Bank President Christine Lagarde said at a press conference that “there are always criminal ways to try to circumvent a prohibition, which is why its so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework.”
MiCA is the acronym for the European Union’s Markets in Crypto Assets Framework, which seeks to standardize crypto issuance and trading. It will work with, and within, some of the parameters set by other EU legislation that is focused on anti-money laundering (AML) efforts.
MiCA has yet to be formalized, but Lagarde’s comments bring at least some new urgency to the situation. The pending framework, we note, take a cue from initiatives already being proposed by EU member states.
As reported earlier this month, Luis Garicano, a member of the Alliance of Liberals and Democrats for Europe party, said it is essential the European Union’s new watchdog monitor digital assets because crypto “is one of the fields more prone to money laundering activities.”
Read also: EU Looks to Give AML Watchdog Crypto Oversight
And, separately, Italy this month published new anti-money laundering rules that specifically target crypto companies. By and large, it seems like much of the crime-focused elements of MiCA will tie to the European Union’s fifth AML directive and the Financial Action Task Force (FATF) guidelines that govern crypto companies.
That directive includes a proposal that would create a new EU authority to combat money laundering. That entity would go about coordinating national supervisors, as the European Commission has said, “so the private sector correctly and consistently applies EU rules.” There would also be enhanced cooperation among Financial Intelligence Units (FIUs), “so as to improve their analytical capacity around illicit flows and make financial intelligence a key source for law enforcement agencies.” That authority should be operational by 2024, according to the EC.
Haste may be in order. As reported earlier this week, sanctions are mounting against Russia, and Russian entities are prepared to fight back by making deals with any global actors willing to work with them — and using digital currencies to offset some of the worst effects.
Ostensibly, cryptos might be used to bypass “control points” that are in place from other governments to track fund flows, particularly in and out of Russia.
Learn more: Russia May Turn to Crypto to Go Around US Sanctions
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