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The regulatory landscape of the Ireland
Since Ireland is one of 27 countries that form part of the European Union (EU), their crypto directive and regulatory requirements will be subject to that of the EU. In broad terms, the EU considers crypto assets to be legal, but exchange regulations are different in member states.
During January 2020, the EU’s Fifth Anti-Money Laundering Directive (5AMLD) categorised cryptocurrency and fiat exchanges under their anti-money laundering legislation. This required exchanges to perform thorough Know Your Client (KYC) and Customer Due Diligence (CDD) checks on customers in line with standard reporting requirements. In December of that same year, the EU’s Sixth Anti-Money Laundering Directive (6AMLD) was introduced which made crypto asset compliance even more stringent by adding cybercrime to the long list of basic money laundering crimes.
This was followed by the EU publishing a set of legislative proposals during 2021 which contains consequences for virtual asset service providers (VASP). According to these proposals, Transfer of Fund Regulations (TFR) (aka ‘The Travel Rule’ and pursuant to FATF recommendations) will extend to include all VASPs in the EU. In short, the Travel Rule requires VASPs and other financial institutions, to share relevant originator and beneficiary information alongside virtual asset transactions, therefore hampering criminal and terrorist activities.
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 came into force on 23 April 2021 in Ireland. The Irish Act fully implemented 5AMLD and this brought VASPs within the scope of existing AML legislation.