Ireland’s crypto companies have been subject to regulatory oversight for the first time, with local digital asset companies now complying with anti-money laundering guidelines set by the European Union or the EU.
The EU’s Fifth Anti-Money Laundering Directive, or 5AMLD, was transposed into Irish law on April 23 through the Criminal Justice Money Laundering and Terrorist Financing Amendment Act of 2021.
The legislation requires that companies that work with crypto assets and custodian wallet providers – also known as Virtual Asset Service Providers or VASPs – and the companies that operate VASPS adhere to the same regulatory standards of mainstream financial companies.
Irish VASPs are now required to register with the Central Bank of Ireland within the next three months and conduct due diligence on their clients – including identification, accountability for the origin and destination of their crypto assets, and reporting suspicious financial activity.
Ireland’s previous lack of regulation allowed traders to invest in crypto assets anonymously.
This may be just the beginning of Irish crypto regulation as all VASPs serving European countries worldwide are expected to comply with the European Union’s Sixth Anti-Money Laundering Directive by June 3. and meet strict reporting requirements.
Unlike 5AMLD, the updated guidelines allow European authorities to punish companies and related legal entities, not just rogue employees. VASPs that do not comply with the directive can face heavy fines or closures.