What’s the latest in AML compliance for this past August?
Sumsub’s Legal Department has gathered the key AML compliance events impacting the crypto, gambling and fintech industries from the past month.
From now on, these digests will be released every month. Subscribe to our newsletter to stay up to date with the most important events in the world of AML compliance.
Main Trends: enhancing regulations, travel rule adoption, marketing restrictions
From September 1, 2023, cryptoasset businesses in the UK will be required to comply with the Travel Rule. The FCA’s expectations for firms subject to Travel Rule include:
In addition, the FCA is introducing promotion rules for cryptoassets from October 8, 2023. Financial promotions communicated from outside the UK, but which are capable of having an effect in the UK, are within scope of the financial promotions regime. This applies even if the promotion is not solely targeted at UK consumers.The goal of the upcoming rules is to ensure that cryptoasset financial promotions are fair, clear, and not misleading. Here’s what activities fall under the rules:
In addition, “refer a friend” bonuses are to be banned.
Travel Rule:
Marketing:
Travel Rule—September 1, 2023
Marketing—October 8, 2023
All You Need to Know About UK Crypto Regulations—2023 Guide
What is the FATF Travel Rule? The Ultimate Guide to Compliance (2023)
The U.S. Securities and Exchange Commission (SEC) has been active in regulating and enforcing rules around cryptocurrencies, taking a number of actions against companies and individuals for failing to comply with several laws, including the Securities Act of 1933.
The Securities Act of 1933, often referred to as the “truth in securities” law, has two basic objectives:
The SEC has been particularly focused on ICOs as they very much resemble traditional securities offerings. If the cryptocurrency is deemed a security, it must follow SEC rules and regulations.
The SEC has also initiated actions against a number of blockchain and cryptocurrency companies over fraudulent activities, such as misrepresenting the potential profits from investments or failure to disclose information to investors.
It’s crucial for virtual asset service providers, as always, to trade-off between compliance, investor protection and innovation.
Not yet presented
After a public consultation, the Monetary Authority of Singapore (MAS) decided to introduce a “Stablecoin Issuance Service” as an additional licensing payment service. MAS’ stablecoin regulatory framework will apply to single-currency stablecoins (SCS) pegged to any G10 currency issued in Singapore. In addition to standard money service business requirements (AML, technology, reserve assets, etc), issuers of such SCS will have to fulfill key requirements relating to:
Stablecoin issuers operating in Singapore
Not yet presented
MAS Finalises Stablecoin Regulatory Framework
Now, crypto companies in South Korea will have to adjust their systems in accordance with the new regulation to stay compliant and avoid financial penalties. The Act will ensure that crypto users can protect their assets.
Any virtual asset service provider involved in any of the following activities:
The Financial Services Commission (FSC) of South Korea announced that the Act on the Protection of Virtual Assets Users is expected to go into effect in 2024.
South Korea Crypto and Travel Rule Regulations – All You Need to Know in 2023
In July, the Virtual Asset Bill became law in Namibia. The Act proposes 5 classes of licenses for virtual asset providers. The regulatory authority responsible for supervising virtual asset service providers and associated activities will be presented in the National Gazette. The legislation seeks to ensure consumer protection, address market abuse, and prevent money laundering.
Virtual asset providers operating in Namibia
In force
National Assembly: VIRTUAL ASSETS BILL
Various areas of Digital Asset Providers license conditions are now covered by enhanced DASP registration promoted by the Autorité des marchés financiers (AMF)—the financial market regulator in France. The amendment prescribes adequate security and internal control systems; systems for managing conflicts of interest; clear, accurate and non-misleading information, public pricing policies, specific custody provisions (segregation of client assets vs. own assets); prohibition on using client assets without their express prior consent; agreement signed with clients, resilient and secure IT system; a signed agreement with clients, and a resilient and secure IT system. These changes, which will apply from January 1, 2024, are also intended to anticipate the transition to the European Regulation on markets in crypto-assets (MiCA) by adjusting the provisions relating to licenced DASPs.
Virtual Asset Providers
January 1, 2024
On July 26, the UK GC proposed changes to Licence Conditions and Codes of Practice (LCCP), Remote Gambling and Software Technical Standards (RTS), and arrangements for Regulatory Panels. In particular, these updates will be related to:
UK-licensed gambling operators
Consultation ends on October 18, 2023
Philippine Amusement and Gaming Corporation (Pagcor) has announced the details of a new regulatory framework for offshore gaming licensees. In accordance with updated Gaming Licensing Regulations, gambling operators shall provide or carry out internet gaming operations in the Philippines or through a Philippine legal entity only with a valid license. Non-licensed operators will be held liable in case they are found to be involved in any illegal activity.
Gambling operators providing the services in Philippines
In force
PAGCOR introduces new regulatory framework for offshore gaming
PS: Within a month upon the implementation of offshore gambling regulations, the Philippine Amusement and Gaming Corporation is taking legal action against 33 offshore gaming licensees, including some who have left the country, over unpaid fees. (Source)
On July 14, the National Council of Legislators from Gaming States (NCLGS) adopted a resolution to help states develop robust responsible gaming standards.
The NCLGS resolution includes the following suggestions:
The gaming sector
In force
NCLGs Helps States Develop Effective Responsible Gaming Standards
The EU Digital Identity Wallet will revolutionize digital identification by giving Europeans control over their personal data with the full convenience of mobile apps. They will be able to use online services and provide identity credentials in full control of their personal data. The EUDI wallet could be used for travel, health, banking, education, and more.