The European Securities and Markets Authority (ESMA) has collaborated with the Securities and Exchange Commission (SEC) to outline regulations governing the crypto industry, Bitcoin.com reported.
The move indicates that the regulators have put the crypto among their priorities. They seek to educate market participants about the potential risks that would face them.
Steven Maijoor, chairman of ESMA, said: “ESMA can look back on a successful first nine years that has included the development of the Single Rulebook and establishing itself as a credible supervisor of CRAs and TRs.”
He added that the agency aims to ensure the consistent implementation of the Single Rulebook. “With our new powers in this area, we will adopt a risk-based approach, in cooperation with national authorities, to supervisory convergence across the EU,” he added.
The authority has actually implemented plans concerning initial coin offerings and crypto derivatives. The latest plans are aimed at introducing legal frameworks governing the crypto market in general.
The EU has introduced its 5th Anti-Money Laundering Directive (5ALMD), which came into effect as of January 10. The new law, which was first introduced on July 9, 2018, is considered as an effort to bring increased transparency to financial transactions for pushing back against money laundering and terrorist financing across Europe.
The 5ALMD will give European financial regulators increased access to information via centralized bank account registers. According to a 5ALMD fact sheet, it will also tackle terrorist financing risks linked to anonymous use of virtual currencies.
However extensive practices like know-your-customer (KYC) and anti-money laundering (AML) are encouraging a number of firms to shut down their operations in the EU and move overseas.