Last week, for the first time ever,the European parliament backed the European Union’s set of rules to regulate crypto asset markets such as Bitcoin.

According to Reuters, the EU parliament voted by 517 in favour of the world’s first comprehensive set of regulations to regulate crypto asset markets and only 38 votes against this decision was raised. The EU has already approved the rules which is set to be rolled out in mid-2024 and will require firms that issue and trade crypto assets in the 27-country bloc to be licensed by the national regulator and Mairead McGuinness, the EU’s financial services chief stated that “I hope that our rules could become a model for other countries”.

This sentiment was echoed by Stefan Berger, the lawmaker who steered the rules through parliament saying, “This regulation brings a competitive advantage to the EU. The European crypto asset industry has regulatory clarity that does not exist in countries like the US”. AML Intelligence reported that parliament also backed new rules for tracing transfers of crypto assets such as Bitcoin and electronic money tokens.

They further reported that the international “Travel Rule” is already in play and refers to revealing information regarding the source and recipient of crypto assets which will have to be stored on both ends of the transfer to further prevent the laundering of money.The tracing rule also covers transactions with a value that exceeds 1000 euros from “self-hosted” wallets or the crypto address of a private user.

The situation in the UK

The British government introduced plans in February this year to regulate crypto assets and these plans were opened up for consultation which ends on 30 April 2023. The UK wants to position itself as a“global hub for crypto asset technology” as stated by the prime minster of the UK, Rishi Sunak.

The economic secretary to the UK Treasury,Andrew Griffith also voiced the same objective in a recent CNBC interview starting that specific crypto asset regulations could come into force within thenext 12 months. He said “We’ve got control back of our rule book, not something the U.K. has had for decades so we’ve got the ability to move in an agile and proportionate way. And I’m definitely keen we make the most of that opportunity.”

CNBC also reported that Griffith said that the U.K.’s regulatory approach would mix both existing regulations and new ones. He added that “Wherever possible, we want to see the same asset, the same transaction regulated in the same way. But there are some additional opportunities in thecrypto asset or distributed ledger space, and we want to take advantage of that”.

Preparation is key

With the new crypto asset regulations that will be implemented in the EU and UK firms must act proactively and ensure that they comply with the new regulatory regimes. LysisGroup has the necessary skills and expertise to assist firms in this regard since we have helped a number of firms with complex and contentious regulatory aspects regarding crypto registration as well as on-going regulator relationships and day-to-day operations management.

We have assisted many global crypto asset firms to obtain registration in various jurisdictions and are uniquely qualified to assist Virtual Asset Service Providers (VASPs) to prepare for a regulatory registration application.

Lysis Group also has the necessary expertise to provide consulting and operational support by helping firms to not only implement the Travel Rule effectively but to also operationalise the legislation by embedding this into the business-as-usual processes followed by firms. We can further review the adequacy of platform functionality to identify missing/incomplete beneficiary/originator information. We can also review and uplift policies and procedures in line with jurisdictional Travel Rule amendment. Lastly, but equally important, Lysis can provide the required training to adequately reflect the Travel Rule and empower staff to meet all the requirements effectively.

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