Crypto mining is a lucrative business, and companies are willing to invest millions of dollars in crypto-related projects. However, there are certain problems connected with crypto mining and the European Parliament wants to minimize the damage caused by illegal activities. Unfortunately, some people are trying to use mining to conceal their activities.
The parliament published a study related to crypto-assets. This study belongs to the Policy Department A of Directorate-General for Internal Affairs identified several legislative blind spots. Two employees of the University of Antwerp, Belgium prepared this study.
Let’s have a look at this study requested by the ECON Committee. This study revealed several challenges and the need for regulatory response and crypto mining is one of them. Cryptocurrency mining may be used as a tool to “create clean cash” by criminal groups.
Importantly, newly mined coins are clean and if someone is willing to convert them into fiat currency or other crypto-assets, the resulting funds are also clean.
Legislative blind spots and crypto industry
The European Parliament also recommended amending the definition of cryptocurrencies. The purpose of this recommendation is to tackle illicit fundraising activities.
Interestingly, this study also identified several other blind spots in current guidelines. For instance, guidelines for crypto-to-crypto exchanges as well as financial services providers that deal with token sales.
Moreover, lawmakers recommend the creation of a regional Anti-Money Laundering (AML) as well as Combating the Financing of Terrorism (CFT) regulator.
Furthermore, European AML watchdog should hire, knowledgable IT specialists to analyze the AML/CFT risks related to new technologies.
Last but not least, this study highlighted important regulatory concerns. Moreover, the authors of this study took into account recent developments and suggested regulatory responses. The members of the European Union, as well as other countries, should pay more attention to crypto-assets to prevent various illegal activities.