Ireland has urged all Virtual Asset Service Providers (VASPs) to register with the central bank. The firms have been given three months to comply.
On April 23, Ireland issued a notice requiring all VASPs operating in the country to register under the country’s central bank. The registration will ensure that the firms comply with the Anti-Money Laundering (AML) and Countering Financing Terrorism (CFT) obligations stipulated by the country’s regulator.
The new directive comes after the country established the EU’s Fifth Anti-Money Laundering Directive (5AMLD) under local laws.
Virtual asset service providers in Ireland
The Central Bank of Ireland categorizes VASPs as firms that enable the exchange of crypto assets for fiat currency or other crypto assets. It also defines these firms as those offering custodian services and enables participation in the financial services sector. According to this definition, Irish firms offering any services related to crypto are categorized as VASPs.
Firms that find themselves under this category will be required to register with the country’s central bank. Global firms that are also offering their services to the citizens of Ireland will also be required to register.
Firms that register with the central bank will be assessed regarding the measures they have put in place to abide by the AML/CFT guidelines. The executives and owners of the registered firms will also be tested for credibility to ascertain that they will protect the integrity of the financial sector from money laundering and terrorist financing.
Firms that will fail to comply with the new directive with be charged with a criminal offense. If a firm fail to meet the obligations stipulated in part 4 of the CJA 2010 to 2021, the firm will be fined, and its executives may face a jail term.
About 5AMLD Guidelines
The 5AMLD seeks to address the issue of anonymity in the digital financial service sector. Companies that are obligated under this rule are required to conduct a mandatory money laundering and terrorism financing risk and to conduct due diligence and assessment of their customers. The firms are also required to monitor transactions, flag and report suspicious activity and keep records of every transaction.
Some countries in the European Union have already implemented the guidelines stipulated under 5AMLD. After the Netherlands implemented the framework, many crypto companies seized their operations and sought new markets in other countries. Crypto firms argue that the 5AMLD framework will suppress the cryptocurrency industry by removing the anonymity associated with crypto transactions.