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According to Aleksi Grym, a digital euro might not fall under e-money laws - could also fall under bank deposits, or it might require an entirely new legal category. Also, 5AMLD is just one directive, but payments are regulated by many directives, regulations, and national legislation, different in each country. Legislation is not uniform across the EU. Also. a key point is that even if something (anonymity in this case) would be really beneficial to have, it doesn't necessarily mean it should be the central bank who provides it.

De Nederlandsche Bank (DNB) has imposed a new set of requirements on Netherlands-based, crypto-asset companies that want to officially register. Among other things, the Sanction Act has forced local firms to monitor their customers' withdrawals and even ask for screenshots of their wallets. https://www.toezicht.dnb.nl/en/2/50-237925.jsp

According to a CipherTrace study 56% of virtual asset service providers lack strong know-your-customer (KYC) practices, and 81% of decentralized exchanges (DEXs) have little-to-no user verification. The study analyzed more than 800 cryptocurrency exchanges, as well as over-the-counter trading desks and other kinds of service providers. It looked at 21 DEXs, which have seen massive trading volume growth over the past year, and are designed to let users exchange currencies without a third party and therefore bypass certain regulatory obstacles.

The U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) have filed charges against crypto derivatives exchange BitMEX and its owner-operators. They are accused of operating a facility for the trading or processing of swaps without having CFTC approval as a designated contract market or swap execution facility, and operating as a futures commission merchant by soliciting orders for and accepting bitcoin to margin digital asset derivatives transactions, and by acting as a counterparty to leveraged retail commodity transactions. They are also accused of violating anti-money laundering (AML) and know-your-customer (KYC) regulations. https://www.cftc.gov/PressRoom/PressReleases/8270-20

The European Central Bank's recent report exploring the idea of issuing a retail central bank digital currency (CBDC) claims that "regulations do not allow anonymity in electronic payments and the digital euro must in principle comply with such regulations". In fact, the Fifth EU Anti-Money Laundering Directive (AML5) exempts issuers of e-money/prepaid cards from collecting customer information if user holdings do not exceed EUR50 (EUR150 for non-rechargeable stored value cards). Why did the EU build an anonymity exemption into payments law but now chooses to avoid exploiting it in potential CBDC designs?

Binance has begun blocking U.S. users from accessing its crypto-asset platform, more than a year after first announcing that it would stop serving U.S. residents starting September 2019. Until now, a U.S. resident just had to click "I'm not [American]" to set up an account. Binance is now sending emails to U.S. residents based on their IP addresses in what appears to be a significant step toward enforcing its previously announced blockade of such users.

The Ministry of Finance of the Russian Federation has proposed legislation that would require citizens to report ownership of crypto-assets to the tax authorities. If the citizens fail to declare digital assets transactions worth $586,000 or more, they can face imprisonment of up to three years. Russian citizens have to report these transactions to the tax authorities at least twice every three years. The Ministry mentioned that the first time to report the ownership of crypto assets should not be later than 30 April 2022. https://minfin.gov.ru/ru/press-center/?id_4=37278-minfin_rossii_razrabotal_paket_zakonoproektov_po_tsifrovoi_valyute

Blockchain analytic firm Elliptic has found that the proportion of Bitcoin (BTC) transactions linked to criminal activity is way down. However, as a result of heightened know your customer (KYC) requirements, exchanges have lost ground as a destination for illegal crypto and the use of privacy wallets has increased.

Circle CEO Jeremy Allaire sent a letter to the U.S. Department of the Treasury, appealing for regulators to collaborate with the industry in adopting crypto regulations. He took particular aim at rumored proposed regulations that would prohibit unhosted or self-hosted wallets, claiming that they would significantly harm industry and American competitiveness and yield economic and industry advantage to Chinese firms. Allaire said that industry and regulators need some time to sort out best practices in regulating emerging technology together. Four members of the Congressional Blockchain Caucus also sent a letter to Treasury Secretary Mnuchkin defending the technology behind self-hosting wallets.

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department, issued a fact sheet spelling out that the information that institutions are permitted to share under the 2001 Patriot Act. Overall, the sheet seemingly lowers the obstacles for further sharing of personal customer information among banks, the threshold of what qualifies as "suspicious" activity and whether the entities sharing customer information even need to be financial institutions. https://www.fincen.gov/sites/default/files/shared/314bfactsheet.pdf

The Centre Consortium has blacklisted USDC addresses in response to law enforcement requests. Centre said it complies with all binding court orders that have appropriate jurisdiction over the organization. USDC runs on the Ethereum network, and a transaction on Etherscan indicates that, in the past, Centre has called "blacklist(address investor)" functions on addresses, essentially freezing all coins on them. When an address is blacklisted, it can no longer receive USDC and all of the USDC controlled by that address is blocked and cannot be transferred on-chain.

The US Treasury Department Office of Foreign Asset Control (OFAC) released a new brochure with crypto-specific guidance on navigating U.S. sanction controls. It largely pushes the idea that OFAC expects virtual currency operators to shoulder the same responsibility for avoiding sanctions violations as other financial institutions. OFAC names a range of actors that must develop risk-assessment programs, including technology companies, exchangers, administrators, miners, and wallet providers, as well as more traditional financial institutions that may have exposure to virtual currencies or their service providers.

The Financial Action Task Force (FATF) updated its 2019 Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers (VASPs). The FATF standards require countries to assess and mitigate their risks associated with virtual asset financial activities and providers; license or register providers and subject them to supervision or monitoring by competent national authorities. VASPs are subject to the same relevant FATF measures that apply to financial institutions. This guidance is intended to help countries and VASPs understand their anti-money laundering and counter-terrorist financing obligations, and effectively implement the FATF's requirements as they apply to this sector. The guidance provides relevant examples and potential solutions to implementation obstacles.

The U.S. Department of the Treasury reported that U.S. adversaries have increasingly turned away from the U.S. dollar to facilitate their transactions as American sanctions seek to target everything from Iranian oil sales to individuals accused of human rights abuses. The report cited rising risks from new payment systems, and the advent of digital assets, and called for a more multilateral approach to sanctions policy at the Treasury, in order to keep up with changes in the global financial system.

"Eight FATF Recommendations were re-ranked in the 2021 Report, seven of which saw ratings increase. One FATF Recommendation pertaining to non-profit organizations saw its rating decrease from "Compliant" to "Partially Compliant". Following the 2021 Report, Canada is no longer Non-Compliant with any FATF Recommendation."

The IMF published two papers aimed at assisting countries in their understanding and mitigation of the money laundering (ML), terror financing (TF), and financing of the proliferation of weapons of mass destruction (PF) risks related to virtual assets (VAs). The first paper explains why VAs are vulnerable for misuse for ML/TF/PF purposes and clarifies which assets and service providers should be subject to AML/CFT measures. It discusses the measures that all countries should take, and the type of action necessary in instances of criminal misuse of VA. The second paper focuses on the AML/CFT regulatory and supervisory framework for virtual asset service providers (VASPs), and discusses the necessary AML/CFT measures and provide examples of practical solutions to implement them. https://www.imf.org/en/Publications/fintech-notes/Issues/2021/10/14/Virtual-Assets-and-Anti-Money-Laundering-and-Combating-the-Financing-of-Terrorism-1-463654 https://www.imf.org/en/Publications/fintech-notes/Issues/2021/10/14/Virtual-Assets-and-Anti-Money-Laundering-and-Combating-the-Financing-of-Terrorism-2-463657

The IMF has published a working paper that explores the correlation of crypto-asset usage with indicators of corruption, capital controls, a history of high inflation, and other factors. It finds that crypto-asset usage is significantly and positively associated with higher perceptions of corruption and more intensive capital controls. The results support the case for regulating crypto-assets, including know-your-customer approaches, as opposed to taking a laissez-faire stance. https://www.imf.org/en/Publications/WP/Issues/2022/03/25/Crypto-Corruption-and-Capital-Controls-Cross-Country-Correlations-515676

"Physical cash should be the standard for evaluating how to strike a balance between ensuring privacy and adhering to anti-money laundering (AML) and countering the financing of terrorism (CTF) rules. At a minimum, this implies allowing real anonymity and transaction privacy for daily life transactions up to limits that are similar to the current limits for cash. In addition to full anonymity for low-value transactions, a high level of pseudo-anonymity should be provided for all larger transactions to ensure a high level of identity protection."

According to a Reuters report, Binance kept weak know-your-customer (KYC) checks and did not properly cooperate with authorities, despite its public promises about compliance. The report was based on interviews with dozens of former employees of Binance, advisers and business partners, as well as the review of hundreds of documents. According to the report, Binance has refused to answer regulators and partners' questions about its operations, and ignored its own compliance advisor recommendations to avoid customers in countries with money laundering risk.

We are only intercepting a miserable one percent of the dirty money. The costs that the regime impose on the finance sector are staggering. Yet these enormous costs achieve next to nothing. Now, this is not to say that the money is totally wasted, because undoubtedly some serious crimes are detected or deterred because of the regime. While we would all agree that we need more effective action against serious and organised crime, it is not at all clear that the money spent on AML is worth it. In fact, the global Money Laundering/Terrorist Financing (ML/TF) regime is, according to the Journal of Financial Crime 25(2), "almost completely ineffective in disrupting illicit finances and serious crime".