MLD5: EU's Latest AML Directive Introduces Cryptocurrency Regulation

5^th Money Laundering Directive – The European Union's regulatory gaze begins to shift towards crypto-currency exchanges and custodian wallet providers

Cryptocurrency exchanges and custodian wallet providers are due to be brought within the scope of regulation at an EU law level. This will arrive in the form of the Fifth Money Laundering Directive ("MLD5") which is a proposed EU Directive aiming to amend the Fourth Money Laundering Directive ("MLD4"). By way of background, MLD4 applies to a varied range of businesses deemed at risk of being involved in money laundering or terrorist financing.

The European Commission (the "Commission") has identified cryptocurrency exchanges and custodian wallet providers as the key players controlling access to cryptocurrencies. Accordingly, the Commission aims to bring these entities within the scope of MLD4 for purposes of improving the detection of suspicious cryptocurrency transactions. The Commission explained in its February