An Overview of Global Crypto AML Regulations
Crypto AML regulations around the world diverge in many ways, and firms operating in multiple jurisdictions will need to understand the nuances of each market they operate in. Indeed, navigating regulatory arbitrage is one of the biggest challenges crypto compliance teams face. Some of the major markets explored in the report include:
Crypto AML Regulations: The Americas
In the United States, the Anti-Money Laundering Act 2020 (AMLA) brought into the scope of the Bank Secrecy Act any providers that deal with virtual assets and digital assets. Since then, however, crypto regulations in the US have continued to move at a rapid pace. In March 2022, President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets (EO).
In Canada, cryptocurrency offering providers are treated as issuers of securities, and dealers in virtual currencies must register as money service businesses (MSBs). Additional requirements are set out in Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFRs).
Crypto AML Regulations: Europe
Across the European Union, crypto regulations are currently governed by the 5th Anti-Money Laundering Directive, which brought crypto-to-fiat exchanges and custodial wallets into scope. However, the EU is introducing a new AML/CFT package that will have significant implications for cryptoasset service providers.
The United Kingdom’s government has announced plans to make the country a global cryptoasset technology hub — including recognizing stablecoins as a form of payment. The government is also reviewing cryptoassets as part of its wider look at the country’s economic crime legislation. The UK’s regulator — the FCA — has issued Dear CEO letters on managing cryptoasset risks and also recently issued a joint statement from UK financial regulatory authorities on sanctions and the cryptoasset sector.
Crypto AML Regulations: Asia Pacific
Australia treats cryptoassets as either financial products regulated by the Australian Securities and Investment Commission (ASIC) or as consumer products regulated by the Australian Competition and Consumer Commission (ACCC). Cryptoasset exchanges or cryptoasset secondary service providers (CASSPrs) are registered with AUSTRAC for AML/CFT purposes.
In Singapore, cryptoassets are regulated under the Payment Services Act (PSA) as “digital payment tokens” (DPTs), and cryptoasset providers are regulated as “digital payment token services.” They must be authorized by the Monetary Authority of Singapore (MAS). The country’s recently passed Financial Services and Markets Bill 2022 also brings into the scope of local regulation cryptoasset firms that are located in Singapore but offer their services abroad. The bill also introduced important new licensing requirements and powers for MAS.
Japan was one of the first countries to introduce crypto-specific regulations, with different types of tokens subject to different types of regulation. Their regulatory status is enshrined in the Payment Services Act. The country’s next regulatory moves are likely to relate to crypto exchanges, in part to help manage sanctions risks associated with Russia.
By contrast, in China, only the country’s own digital yuan is accepted as legal tender, with all other cryptocurrency transactions banned as of September 2021. Individuals are not yet banned from holding cryptocurrencies, however.
Explore regulatory requirements country-by-country in more detail by downloading our full report below.