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The Czech Republic is expected to enforce stricter oversight of cryptocurrencies than that required by the European Unionâs bloc-wide anti-money-laundering regulatory regime.
The Czech Republic is expected to enforce stricter oversight of cryptocurrencies than that required by the European Unionâs bloc-wide Anti-Money-Laundering (AML) regulatory regime.Â
According to a report from local newspaper HospodĂĄĆskĂ© Noviny on Aug. 8, the Czech Republicâs transposition of the European Union (EU)âs Fifth AML Directive (AMLD5) looks set to impose yet stricter requirements on cryptocurrency firms than those established by Brussels.
Above and beyond EU regulations
As an indication of the stringent measures ahead, HospodĂĄĆskĂ© Noviny reveals that Czech regulators plan to impose a hefty fine â up to half a million koruna or roughly $20,000 â on cryptocurrency firms should they fail to register their operations with the national Trade Licensing Office.
Such a measure would go well beyond that which is required by the EUâs Fifth Anti-Money Laundering Directive, which came into force in July 2018 and established a revised legal framework for EU financial watchdogs to regulate cryptocurrencies and better mitigate the risks of money laundering and terrorism financing (CFT).
AMLD5 notably extends the scope of regulatory oversight to crypto exchanges and wallet providers and enforces stricter transparency requirements directed at anonymous payments â whether made via exchanges or prepaid cards.Â
While HospodĂĄĆskĂ© Noviny does not reveal a timeline for the Czech governmentâs formalization of both AMLD5 and its additional rules, EU member states are compelled to incorporate the directive into their respective national laws by Jan. 20, 2020.Â
The report further notes that Czech lawmakersâ AML rules will affect firms for which the EUâs draft provisions would not require such extensive oversight. HospodĂĄĆskĂ© Noviny argues that such impositions are likely to jeopardize the competitiveness of the nationâs crypto sector.
Zeal of the convert
This is not the first time that various countriesâ interpretations of AMLD5 has exceeded the directiveâs original scope.Â
This June, Coin Center â a nonprofit research and advocacy center focused on crypto-related public policy issues â urged Her Majestyâs Treasury not to over-broaden the scope of the United Kingdomâs AML/CFT rules in its transposition of the EU directive.
In February, the Cyprus Securities and Exchange Commission has similarly proposed to bring several additional areas of crypto-related activity under AML/CFT obligations, which are notably not included in the provisions of AMLD5.
Update: 08:00 EST: The original version of this article stated the fine amount in Euros. It has been corrected to Czech koruna and dollar equivalent.
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