New European anti-money-laundering guidelines will apply to the cryptocurrency ecosystem in Spain
Spain has been working on the approval of new measures to comply with the EU’s Fifth Money Laundering Directive (AMLD 5). The Spanish parliament still has to vote on the updated regulations to the money-laundering legislation during the second half of 2020. When these regulations are in place, the central bank would be able to police the country’s crypto providers.
The bill is still in a draft version and, if approved, crypto exchanges, wallet service providers and crypto custodial service providers that are operating in Spain will be forced to register with a financial regulator. This means that companies will need to prove they are meeting the anti-money-laundering requirements to be able to continue their legal operations. These AMLD5 rules went into effect in January this year and they are basically pan-European anti-money-laundering directives that members of the European Union must implement into their national laws.
This is the first time that crypto exchanges and custodian wallet providers will be operating within the scope of the EU anti-money laundering rules. Operators will be forced to disclose their trade identities and report any suspicious activity, as well as register with Spanish authorities. The effort to place regulations on cryptocurrency started more than two years ago; however, they were mostly focused on finding and taking down illegal operations.
Given that Spain does not have specific legislation for governing cryptocurrencies, the country’s regulators only tried to provide a broad definition of virtual assets for the purpose of the AML laws requirements. The current legislation does not have any formal definition, although interestingly, the central bank does describe concepts like initial coin offerings and makes a distinction between tokens and utility.