It is not easy to explain what a cryptocurrency is. Explaining money laundering with cryptocurrency is more difficult too.
To be as simple as possible, we can say that it is a digital payment system, not controlled by a centralized body, let alone a central bank, which has control, issue and use.
A real revolution of transactions, which allows you to exchange value and invest, without physical contact, but unlike wire transfers, credit cards or other payment systems, it does not imply the payment of services, but liberalizes transactions and exchange of values in a concrete and usable way, so much so that there are now thousands of crypto currencies, about thirty are the most used, which are completely entrusted to users, who simply with a smartphone and a peer to peer network communicate, exchange and transfer .
EU has been introduced a definition of crypto asset since it has always as mentioned above, these particular forms of digital value are often linked to sophisticated and innovative money laundering phenomena.
The community legislator with Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, which amends Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directives 2009/138 / EC and 2013/36 / EU, has clearly addressed the dangers of using virtual currencies for illicit purposes .
The service providers, whose business consists in providing exchange services between virtual currencies in legal tender currencies and the digital wallet service providers, enjoyed a regulatory “hole”, which did not oblige them to fulfill the obligations of adequate verification, identification of the beneficial owner and reporting of suspicious transactions. The first concern of the legislator was and is the possibility of using digital transactions while maintaining pseudo anonymity, which potentially allows improper use for criminal purposes. Unfortunately, even legislating in this sense with the inclusion of service providers and digital wallet service providers will not solve the problem of anonymity of virtual currency transactions, which will always be possible as long as the same policies are not implemented globally. Criminal operations will certainly not resort to transparent crypto exchanges , much of the virtual currency environment will likely remain characterized by anonymity.
To try to overcome these risks related to anonymity, a system is required that monitors and associates the addresses of virtual currencies to the identity of the owner of that currency, stimulating the user to self-declare themselves on a voluntary basis during registration, associated for the Exchange, to a strict KYC implementation
The national legislator, driven by these needs, has as known, with the legislative decree n. 125 of 4 October 2019 in implementation of the V EU anti-money laundering directive 2018/843 introduced in Legislative Decree 231/2007 additional specific measures aimed at tackling money laundering phenomena connected with the use of virtual currencies.
In particular, it was intended to expand the definition of “virtual currency” pursuant to art. 1, paragraph 2, lett. qq), also including “the investment purpose”, in the definition of virtual currency.
The figure of the Exchange and digital wallet service providers (so -called wallet providers ) are included in the list of ” non-financial operators ” which is therefore defined in practice, real brokers who manage a virtual portfolio on behalf of third parties.
These professional figures are equated with traditional money-changers and therefore, as subject to anti-money laundering provisions, are required to register in a special section of the register kept by the Organism of Agents and Mediators.
In light of the considerable interest, given an exponential offer of digital trading platforms for investment in crypto assets , it is necessary to make them fall into the category of “instruments” or “financial products, and the Exchange and wallet providers must be recipients of the obligations inherent to the legislation. anti-money laundering.
But given the multifaceted use of cryptocurrency, which like a three-headed Janus is an investment, a currency and a store of value; in order to determine when and if a purchase of cryptocurrencies is a financial investment, as a principle it must be clarified and verified whether the cryptocurrency exchange operation is carried out and then converted into legal currency and therefore aimed at making a profit; in this case the transaction assumes the financial investment fees, albeit atypical.
Although only a promoter of the virtual currency exchange platform, the company involved fully assumes the role of supplier: it is a natural or legal person, public or private entity, which in the context of its commercial or professional activities, is a supplier. financial services contract subject to distance contracts, which, through a distance contract having as its object a financial service, places between the consumer public virtual currencies.
The subject who provides these services is required, by law, to raise the information obligations towards the consumer.
The online investment platform, even on the supplier (or promoter ) of the service, is obliged to make the contents of the economic-contractual operation understood in detail, so as to allow the client investor to develop a meditated negotiation choice.
These disclosure obligations are not form, but substance in a particularly volatile market such as that of crypto currencies.
There are considerable risks for the consumer as he is not aware in what he is investing in, whether in the purchase of virtual currency, or related financial product or if he is buying bonds or shares of a shareholding in a company.
Certainly recent rulings considering “transactions that generate taxable material” as value producers are therefore relevant, when, “by virtue of the nature of the transactions carried out through said values, where and to the extent that said use generates taxable material”. a sort of atypical capital gain where the purchase and subsequent sale at a higher price entails a profit for the user and as such is subject to taxation.
The regulators believe that “when the sale of bitcoin is advertised as a real investment proposal, with the aid of advertising on specific sites where information is thus given to savers who are able to evaluate whether or not to join the initiative, stating, for example, fabulous earnings that “those who have bet in bitcoin in two years have earned more than 97%” “, then it must be assumed that” the the sale of bitcoins is advertised as a real investment proposal “
It is now clear that we are witnessing a revolution that reveals great opportunities and as many potential risks. Europe is the largest global cryptocurrency market with 25% of the “received value” and the technology of distributed ledgers (DLT, or more simply blockchain) is changing our society and relationships and exchanges between people, including the world of finance;
By 2030, the abandonment of the use of cash is expected and in addition, cryptocurrencies will soon represent 10% of total transactions. Cryptocurrencies capitalized 2.5 trillion dollars in the market last year, and in Western Europe the crypto sector in 2021 reached 46.3 billion trades for institutional investors only.
This is why it is important and indispensable that the Anti-Money Laundering legislation has embraced all service providers both relating to the use of virtual currency and the virtual wallet, making them anti-money laundering safeguards and therefore obliged to report any suspicious transactions.
Among the data that may be requested are those relating to operations carried out by subjects registered in the territory of the Italian Republic: customer identification data, summary data relating to the overall operations of each service provider relating to the use of virtual currencies and service provider of digital wallet for single customer.
Offenses related to the offer – Scams
The activities proposed to the consumer often concern trading services on web platforms and financial instruments of complex understanding, such as derivatives with underlyings, crypto-currencies “.
The products offered illegally are increasingly ‘atypical’ and connected to the world of crypto-assets, an area in which it is possible to suffer full losses of one’s investment .
The scam scheme is very often attributable to the well-known ‘Ponzi scheme’ which ensures high returns to the first customers, creating an illusion of gain to attract further customers who will suffer heavy losses when the chain is interrupted.
Please look at our another article about AML regulation for cryptocurrencies.