Crypto exchanges should lose their licenses if found to have seriously breached anti-money laundering rules, European Union financial supervisors said.
The recommendation comes as lawmakers reach the closing stages of landmark legislation known as the Markets in Crypto Assets Regulation, or MiCA, introducing an authorization regime for virtual asset companies within the 27-nation bloc.
Regulatory authorities responsible for authorizing or registering crypto exchanges and wallet providers should “be empowered to withdraw the authorisation/registration for serious breaches of AML/CFT [anti-money laundering and terrorist finance] rules,” said a report published Wednesday by the three European supervisory authorities responsible for overseeing banks, insurers and securities markets.
MiCA should “appropriately integrate AML/CFT issues in prudential supervision of entities,” said the report, which is looking at whether the anti-money laundering powers contained in rules for different financial sectors are up to scratch. MiCA introduces requirements for stablecoin issuers to hold sufficient capital reserves and to be monitored by regulators such as Germany’s BaFin.
One of the remaining wrinkles in the legislation concerns whether it should include stronger AML controls or leave the issue for a separate, wider review of dirty money rules.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.