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EU Extends Crypto Travel Rules, Mandates Compliance in 6 Months

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The European Union (EU) is intensifying its efforts to combat money laundering and terrorist financing through the imminent enforcement of Travel Rule guidelines for crypto-asset service providers (CASPs). Announced by the European Banking Authority (EBA), these guidelines will become mandatory for all crypto exchanges operating within the EU by December 30, 2024.

Crypto AML/CFT Rules for CASPs
The new EU guidelines represent a significant step in integrating crypto activities into the EU’s existing Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework. Regulation (EU) 2023/1113, also known as the Travel Rule Guidelines, requires CASPs, as defined by the Markets in Crypto Assets (MiCA) regulation, to collect and report information on transfers of funds and digital assets.

Under these guidelines, CASPs must:

  • Gather user data for transactions.
  • Identify service-related purchases.
  • Detect potentially suspicious transfers.
  • Establish clear policies for handling multi-intermediated transactions and cross-border transfers.

The EBA acknowledges that achieving compliance may financially strain crypto exchanges and service providers. However, it expects the long-term benefits to outweigh the initial costs, stating, “These Guidelines are expected to contribute to making the fight against ML/TF more effective.”

Continuation of Existing AML/CFT Compliance
Crypto exchanges already subject to the EU’s existing Anti-Money Laundering Directive (AMLD) or similar domestic AML/CFT regimes will continue to operate under those regulations. The Travel Rule Guidelines add a layer of compliance specifically targeting digital assets transactions.

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Cardano Meets MiCA Standards
As European governments tighten regulations, the crypto industry is taking proactive steps towards compliance. The Cardano Foundation, in collaboration with the Crypto Carbon Ratings Institute (CCRI), recently released sustainability indicators for the Cardano network that align with the upcoming MiCA regulation.

Cardano’s report highlights:

Its energy-efficient consensus mechanism, which significantly reduces electricity consumption compared to proof-of-work protocols.
The network’s total annualized energy consumption.
Its carbon footprint and marginal power demand per transaction.
This proactive stance from the crypto industry shows a willingness to collaborate with regulators and operate within a transparent and accountable framework. The December deadline for Travel Rule compliance will be a pivotal moment for the EU and the global crypto landscape, ushering in a new era of AML/CFT compliance for virtual assets transactions.

The EU’s enforcement of the Travel Rule guidelines marks a critical development in the regulation of crypto-asset service providers. While compliance may pose financial challenges for crypto exchanges and service providers, the EBA emphasizes the long-term benefits of a more effective fight against money laundering and terrorist financing. The crypto industry’s proactive measures, as demonstrated by Cardano’s alignment with MiCA standards, reflect a growing commitment to regulatory collaboration and transparency. As the December deadline approaches, the crypto sector is poised for a significant transformation towards enhanced AML/CFT compliance.

Source: coinspeaker.com

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Switzerland Regulatory Technology Business Report 2024: Market to Surpass $550 Million by 2029, Driven by Collaborative Opportunities and Data Privacy Solutions

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Swiss RegTech Market

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Blockchain Life 2024: The Visionary and Tectum CEO Alex Guseff Among Featured Speakers

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DLA Piper’s crypto tokenization engine TOKO relaunches as Scintilla

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Following a management buy-out by the management team at TOKO FZE, the business has been rebranded as Scintilla, the revolutionary platform providing on-chain solutions and services to make investments more inclusive, accessible, and efficient. Having been developed within DLA Piper’s Law& innovation portfolio, TOKO – now Scintilla has a fresh brand identity, new leadership, and innovative product offerings. Scintilla is set to reshape the future of finance by enabling businesses to unlock the power of blockchain technology across various asset classes, with DLA Piper remaining as a minority shareholder.

Regulated by Dubai’s Virtual Assets Regulatory Authority (VARA), Scintilla is one of the first digital asset companies to gain full market licenses, marking a significant milestone in the sector’s landscape. Being a regulated entity underscores Scintilla’s commitment to the highest standards of compliance and security while pioneering new solutions for tokenization in the global market.

Innovating Finance Through Tokenization

Scintilla offers a comprehensive suite of tokenization services designed to bring liquidity, transparency, and efficiency to traditional finance sectors. From tokenized financial products, and real estate all the way to new legal funding products, Scintilla’s digital asset solutions enable clients to tokenize assets that were previously inaccessible to investors or illiquid.

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Scintilla’s services include:

Advisory Services: The gateway to successful market entry. From initial opportunity assessment to strategic development of game-changing tokenization-based solutions.

Use Case Development: Bringing products to life. From initial POC development and iteration towards MVP all the way through to the full market launch.

Broker/Dealer Services: Creating new markets. Regulated primary market trading, ensuring the highest levels of trust and security within the tokenization space.

Exchange Services: Universal participation. Seamless, secure secondary trading of tokenized assets, with industry-leading technology and compliance standards.

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Scintilla is uniquely positioned to capitalize on the confluence of Dubai’s world-leading regulatory environment, cutting-edge technology, and the burgeoning RWA market.

A New Era for Scintilla

The relaunch of Scintilla represents more than just a rebranding—it signifies the company’s growing ambition to lead in the digital asset space. With an expanded team of industry experts, including continuing Board representation from DLA Piper, and a clear strategic vision, Scintilla is set to drive the adoption of tokenization in traditional financial markets.

“Our relaunch marks the beginning of an exciting new chapter for Scintilla and the wider industry. We are committed to pushing the boundaries of what is possible in digital finance while ensuring our solutions are underpinned by strong regulatory compliance,” said Tim Popplewell, CEO of Scintilla. “With our new suite of products and services, we are empowering investors to transform the way they manage and access value.”

Jean-Pierre Douglas-Henry, Managing Director, Sustainability and Resilience, DLA Piper added: “Innovation is a key strand in our business strategy. As our business focuses on developing and nurturing innovations that add significant value to our clients through our Law& innovation program, it is fantastic to see this solution spun out into the thriving digital asset space for the next stage of its growth and development.”

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