Cryptocurrencies Pose Money Laundering Risk, EC Roundtable Concludes

The EC's roundtable concluded on Monday with the expression of some concerns about cryptocurrencies and money laundering but nothing too harsh about the market in general.

The European Commission (EC) held on Monday a roundtable discussion on cryptocurrency regulation, with participants including “key authorities, industry representatives and experts” from across the continent. Along with some positives, the panel noted that virtual currencies carry the risk of money laundering and illegal financing.

EC Vice-President Valdis Dombrovskis announced plans for the event last week during an ECOFIN press conference.

The roundtable came to several conclusions and wrapped up with overwhelming support for blockchain technology.

“Blockchain technology holds strong promise for financial markets. To remain competitive, Europe must embrace this innovation,” Dombrovskis said after the roundtable in Brussels.

Naturally, the discussion touched upon cryptocurrencies, which Dombrovskis said are “not currencies in the traditional sense” and may lead to much wild speculation.

Unlike other government-oriented discussions about regulations, however, this roundtable emphasized the need to warn potential investors as it is important for them to know what they’re getting into.

“These [warnings] must be clear, frequent, and across all jurisdictions,” Dombrovskis said.

This is not to say the EC sees no need to regulate the cryptocurrency market.

“Crypto-assets present risks relating to money laundering and the financing of illicit activities. That is why the Commission proposed that virtual currency exchanges and wallet providers should be subject to the Anti-Money Laundering Directive,” he added.

According to the summary of the discussions, the EC appears to want cooperation with the G20 in both following the cryptocurrency market and coming up with regulations to prevent any ripple effects that would be difficult to mitigate.

The EC also might hold future discussions about ICOs.

Although the EU executive body has a predominantly positive view on the potential of the ICO market to help startups secure funds, there are concerns about lack of transparency and the risk of allowing this to become another opportunity for scammers.