Report: Czech Republic Wants to Broaden Crypto Firm Regulation
The Czech Republic seems set to step up its oversight of cryptocurrency exchanges, with recent reports suggesting that it will try to implement more stringent policies than those of the European Union in a pursuit to ensure anti-money laundering (AML) compliance.
On August 8, 2019, local news outlet Hospodářské Noviny reported that, in the light of the Fifth Anti-Money Laundering Directive (AMLD5) published by the EU, the Czech Republic will not only implement the directive’s precepts into its economy but also step things up a couple of notches.
Enacted in July 2018, AMLD5 asks that countries extend their regulatory oversight to cryptocurrency exchanges and wallet providers operating within EU borders. The Czech Republic, however, wants to regulate every cryptocurrency-related firm, regardless of whether they actually trade cryptocurrency or not. Most notably, this would impact mining operators like Braiins, the company behind Slush Pool that is based in Prague.
To start with, regulators will reportedly impose a fine of about $20,000 (500,000 koruna) on all cryptocurrency firms that fail to register their operations with the national trade licensing office.
AMLD5 has seen quick adoption across the European Union. But the Czech Republic would not be the first to go above and beyond its recommendations.
In February 2019, for instance, the Cyprus Securities and Exchange Commission (CySEC) released an announcement and a consultation paper calling for the country to transpose AMLD5 and consolidate the regulation of cryptocurrencies within the country’s borders.
In the announcement, CySEC noted that its CySEC Innovation Hub had received several inquiries from crypto entities which didn’t seem to “fall within the existing regulatory framework.”
CySEC advocated for a formalization of AMLD5, adding that some other aspects of crypto activity should be put under AML regulations as well. These included crypto asset exchanges, transfers of crypto assets and “participation in and provision of financial services related to an issuer’s offer and/or sale of a crypto asset.”