Abstract
Money laundering has developed at the same pace, if not quicker, as the laws that were meant to restrain it. The advent of cryptocurrency escalated the century-long arms race between money launderers and regulators as cryptocurrencies shifted the frontline from the thoroughly governed, centralized financial sector to the (semi)anonymous, decentralized and unevenly regulated cryptocurrency domain. Recent reports indicate that cryptocurrency money laundering represents a problem of considerable proportions. Owing to the fast-paced development of the crypto ecosystem and the growing interconnectedness between cryptocurrency and the traditional financial sector, forward looking and future-proof solutions are a conditio sine qua non for safeguarding the integrity of financial markets. Moreover, as cryptocurrency holds the promise of an accessible and expeditious transaction system, it is imperative to disperse the criminal label attached to it and work towards improving credibility through calculated regulation. Although some progress has been achieved at the EU level, European cryptocurrency anti-money laundering (AML) regulation is still in its nascent stage. European legislators have touched upon the topic of cryptocurrency in AMLD V, leaving considerable space for improvement. The objective of this study is to assess the European Union’s approach to regulating cryptocurrencies from an AML perspective and propose ways forward.
Published Version
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