EU enforces crypto AML
Under a newly agreed EU deal, crypto-asset service providers (CASPs) will need to apply due diligence on customers carrying out transactions amounting to €1,000 ($1,088) or more. Enhanced due diligence will also need to be performed on very-high-net-worth individuals.
“This agreement is part and parcel of the EU’s new anti-money-laundering system. It will improve the way national systems against money laundering and terrorist financing are organized and work together,” Vincent Van Peteghem, Belgian Minister of Finance, said.
“This will ensure that fraudsters, organized crime and terrorists will have no space left for legitimizing their proceeds through the financial system.”
“After several years of negotiations and given past weaknesses, it is positive news that the EU reached agreement on an EU-wide AML framework.”
Crypto Council for Innovation
The EU Commission will draw up recommendations to member states on measure they should follow. They should then carry out risk assessments at national level and commit to effectively mitigating the risks identified in the national risk assessment.
The European Council and Parliament also introduced specific enhanced due diligence measures for cross-border correspondent relationships for crypto-asset service providers.
“After several years of negotiations and given past weaknesses, it is positive news that the EU reached agreement on an EU-wide AML framework,” the Crypto Council for Innovation said. “We welcome this agreement which ensures a more consistent and robust AML framework applicable to a range of providers, including CASPs.”
The step comes as the EU’s landmark Markets in Crypto-Assets Regulation (MiCA) enters its implementation phase later this year.
In and out flows
Bloomberg reported that investors had pulled $579m dollars out of the Grayscale bitcoin ETF, citing cheaper alternative funds as the reason. BlackRock and Fidelity reportedly profited in turn, pulling in $723m and $545m respectively. Fees range from 0.19-0.39%, although some firms have an initial feee waiver.
According to a monitoring source on X, BlackRock held bitcoin worth $1.06 billion on Thursday.
There has been significant commentary in the crypto community about price levels, in particular the current price of bitcoin being lower than expected following last week’s launch. The bitcoin price briefly spiked to nearly $50,000 last Thursday, quickly falling back to $42,000.
“By no means was this launch a mass success,” Ilan Solot, co-head of digital assets, Marex Solutions, told the Financial Times. “Bitcoin’s latest price action shows that this has so far been an underwhelming launch for products that were so highly anticipated.”
Just over a week into trading, the total value of bitcoin ETFs is now just behind gold, and ahead of silver. The value of bitcoin ETFs has reached around $30 billion, compared with silver’s roughly $11 billion.
“For crypto-assets, policymakers have a chance to act before a crisis to adopt higher standards that support responsible innovation.”
Graham Steele, Treasury Assistant Secretary for Financial Institutions
Treasury demands action
The US Treasury has reportedly called on lawmakers to take preventative actions and develop standards “before the next crisis” in crypto. “For crypto-assets, policymakers have a chance to act before a crisis to adopt higher standards that support responsible innovation,” said Graham Steele, Treasury Assistant Secretary for Financial Institutions, speaking at an event at George Washington University Law School.
“At the same time, it is critical that any legislative proposals don’t undermine the already robust regulatory foundations that apply to financial institutions and capital markets.”
Biden’s 2022 Executive Order went some way to addressing crypto policy. That order targeted consumer protection, financial stability, climate-related risks, and national security concerns tied to the crypto sphere.
Ethereum ETF hype
An upgrade to Ethereum known as Dencun is being touted as something that could boost demand for the crypto. But Mark Yusko, CEO or Mogran Creek Capital, told Cointelegraph the chance of a touted ethereum ETF being launched this year is less than 50/50.
Others are more optimistic. “The market is eagerly anticipating the approval of spot ethereum ETF applications by the SEC, potentially in May this year. This adds to the perfect storm of tailwinds for Ethereum, making it instrumental in onboarding mainstream users into the decentralized finance ecosystem,” Akash Mahendra, head of developer relations, Haven1, said.