17 December 2024
In an effort to ensure that Irish legislation aligns itself with new proposed EU reforms concerning Anti-Money Laundering (AML) and counter-terrorist financing (CTF) Jack Chambers, the current Irish Minister for Finance, has sought that the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill which would include crypto assets under Irish AML requirements, be expedited. The aim is to amend the Criminal Justice Act 2010 to ensure virtual asset service providers (VASPs) are covered under AML/CTF, however with the recent general election and discussions around government formation, we will need to watch this space for publication of the Bill.
The forthcoming EU Wire and Crypto-asset Transfer Regulation (WCTR) or Regulation 2023/1113 which will apply from 31 December 2024 and was expedited by the European Commission, will empower financial intelligence units to suspend suspicious crypto transactions, enhancing the scrutiny of cryptocurrency service providers. The WCTR was expedited to address the pressing need for traceability in crypto-asset transfers. Ireland’s proposed regulations will likely incorporate these stricter measures which include rigorous tracking, prohibition of all anonymous crypto transactions, reporting obligations, and administrative and other sanctions for non-compliance to prevent money laundering and terrorism financing.
The proposed updates are expected to cover many areas, including mandatory registration of crypto service providers with Irish regulatory authorities, stricter Know-your-client (KYC) obligations, and enhanced reporting mechanisms for suspicious transactions. There will also be a focus on preventing crypto from being used to fund terrorism or enable tax evasion. Central to this effort is introducing extraordinary transparency measures, including real-time transaction monitoring and user identity verification on crypto platforms.
The CBI stated on their website that:
“It is important that Ireland, as a small, open economy with a thriving financial services industry, is an active participant in preventing its financial system from being used for money laundering and terrorist financing purposes.”
Further to this, Derville Rowland, Deputy Governor of the CBI, has emphasised the country’s commitment to maintaining the safety and integrity of financial innovation.
Having already issued licenses to VASPs, including well-known companies like Coinbase, Ripple, and Gemini, Ireland has emerged as an attractive destination for crypto firms setting up their European operations. This surge highlights Ireland's growing position in the crypto market, although it also raises significant concerns about potential money laundering risks associated with digital assets. With the CBI being named the National Competent Authority (NCA) for the authorisation and supervision of entities that will be subject to MiCAR, we can surely expect more entities seeking authorisation. Therefore, it is crucial to ensure the effective implementation and enforcement of the WCTR, together with making any necessary adjustments to existing national laws.
For now, we await publication of the Bill and any further updates from the CBI.
KPMG Law’s Financial Services Regulation team has significant experience assisting regulated firms with all stages of a firm’s lifecycle, from initial business planning, through authorisation and beyond.
We can assist with reviewing existing governance and processes against regulatory expectations and requirements and can assist with both the authorisation application, as well as the implementation of policies, procedures and operational matters, to effectively navigate the authorisation process with the Central Bank.
