The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 (the “Act”) was signed into law by the President on 18 March 2021 and Minister for Justice, Helen McEntee, signed the commencement order last week, 23 April 2021. This development transposes (most of) 5AMLD into Irish law, further safeguards our financial system from money laundering and terrorist financing and brings Ireland in line with the current EU regime.
The Act will be of particular interest to virtual asset service providers (such as cryptocurrency firms) (“VASPs”) as they will now be deemed as ‘designated persons’ under existing AML laws and the existing rules which apply to financial institutions (such as KYC) will now be extended to VASPs providing the following services:
(a) exchange between virtual assets and fiat currencies;
(b) exchange between one or more forms of virtual assets;
(c) transfer of virtual assets, that is to say, conduct a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another;
(d) custodian wallet provider; or
(e) participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset or both.
It is important for VASPs to be aware of the obligation placed on them under the Act to register with the Central Bank of Ireland. Failure to do so is a criminal offence and could lead to a prison sentence and / or a fine of up to EUR500,000. VASPs carrying on business before the commencement of the Act can continue to operate however they must apply to the Central Bank for registration no later than 3 months from 23 April 2021.
There will be a registry of VASPs published on the Central Bank website.
There was commentary in the Sunday Business Post over the weekend that a potential upside in this development is that domestic Irish banks will be more inclined to provide banking services to Irish crypto firms who have to date found it difficult to open bank accounts and avail of other typical banking services. It would seem likely that domestic Irish banks will become more comfortable now that Ireland has legislated for VASPs which should make it easier for VASPs looking to do business here.
Please get in touch with our Corporate team if you would like any more information on this update, you can contact Ed Butler, Dominic Conlon or Mark Roberts on 01 6393000 or visit www.leman.ie