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EU votes in bill to rein in crypto-asset trading risks

The EU voted in a bill targeting crypto crime; Pakistan was removed from the FATF grey list; and Interpol entered the metaverse.

Eimer Cotter
October 28, 2022

This past week has been a busy period for lawmakers and regulators worldwide, as the EU voted in legislation targeting cryptocurrency-related financial crime; Pakistan’s efforts to improve its AML framework were rewarded with the country’s removal from the FATF grey list; and Interpol have entered the metaverse to counter the increasing cybercrime threat of virtual reality environments.

Find out more on these stories below.

EU Parliament’s Markets in Crypto-Assets bill takes aim at financial crime committed via digital currencies

The European Union (EU) Parliament passed the Markets in Crypto-Assets (MiCA) bill on 10 October 2022. The bill will bring crypto-asset trading further into the regulatory fold, in an effort to mitigate the risk of money laundering (ML) and other serious financial crimes being perpetrated through digital currency trading.

MiCA is set to address the ML vulnerabilities of the EU’s current anti-money laundering (AML) practices regarding financial crime in digital environments. The EU Parliament believes that the bill will enhance consumer protection, increase accountability for cryptocurrency service providers, and strengthen the region’s overall AML framework.

Included in the new legislation is the requirement that crypto-asset values must be pegged to the value of Euros in a ratio of one to one (1:1,) as well as the imposition of a €200m per day trading cap. Additionally, Virtual Asset Service Providers (VASPs), will be expected to implement a range of consumer protection measures and additional systems geared towards monitoring for insider trading.

The EU Parliament is set to vote on MiCA before the end of 2022. If approved, it will likely become law throughout the EU in 2024, giving crypto firms 18 months to prepare for the changes.

Read more on this story at Yahoo Finance.

Pakistan removed from FATF’s grey list following improvement of its AML framework

The global financial crime watchdog, the Financial Action Task Force (FATF), announced the good news in a press release detailing the outcomes of its 20-21 October 2022 plenary.

The announcement came after FATF concluded that Pakistan’s AML regime had not only improved since the June 2018 mutual evaluation and the July 2021 mutual evaluation update, but had achieved the 34 action steps ahead of the recommended deadlines.

Among the issues that Pakistani authorities had needed to address following its 2018 evaluation were to show that they actively implement actions against AML and countering the financing of terrorism (CFT) violations, and that government agency role-players were synchronising their AML/CFT efforts against financial crime.

The Pakistani government’s Ministry of Foreign Affairs issued a 21 October 2022 statement which referred to the removal from the grey list as a “whole-of-nation” achievement, and concluded that the country “looks forward to sharing its expertise, knowledge and experience with other countries to enhance effectiveness of FATF standards at the global level.”

Read more on this story at Kashmir Reader.

Interpol’s new ‘metaverse’ set to help law enforcement fight online financial crime

On 20 October 2022, the transnational law enforcement agency, Interpol, unveiled their cutting-edge online immersive environment, or ‘metaverse’, which is purpose-built to help law enforcement agencies (LEAs) fight cybercrime. This followed the announcement of the findings of Interpol’s first-ever Global Crime Trend report (IGCTR), on 19 October 2022.

The full IGCTR pooled data from respondents throughout Interpol’s 195-country-strong member base and from its own resources which showed that cybercrime, including ‘metaverses’, could both facilitate new criminal typologies and sustain or bolster current criminal activities for longer. Highlighted among the perceived threats posed by the expanding metaverse were increases in both the prevalence and methodologies of online child sexual exploitation and abuse (OCSAE), money laundering, and fraud.

However, Interpol believes that the potential of the metaverse can also be harnessed by LEAs to combat criminals in cyberspace, since it can remove real-world barriers to communication and training among role-players tasked with fighting cybercrime. Meanwhile, Interpol has also partnered with the World Economic Forum (WEF) and others to define and design a framework to govern the metaverse.

Interpol’s General Secretary, Jürgen Stock, was forthright about the global policing network’s new metaverse, stating that “we may be entering a new world, but our commitment remains the same.”

Read more on this story at Interpol.

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