Mass user migration following the end of the Markets in Crypto-Assets Regulation (MiCA) transitional period could strain compliance at virtual asset service providers (VASPs) in the European Union, according to Bruna Szego, chair of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA).
“Because we know customers will rush to withdraw, this will put additional pressure on these VASPs,” Szego said during a Wednesday briefing with the European Parliaments Committee on Economic and Monetary Affairs.
Szego said firms winding down their EU operations could come under pressure as customers rush to withdraw, while licensed crypto companies could face onboarding challenges as they absorb new users. She urged service providers to maintain efficient compliance procedures throughout the transition.
MiCAs 18-month transitional period ended on July 1, requiring crypto asset service providers (CASPs) to hold licenses to continue serving EU customers. The European Securities and Markets Authority said crypto service providers that remain unauthorized by the deadline must take “immediate” steps to wind down their EU activities.
Related: Last-minute MiCA approvals mark end of EU transition period
AMLA maps next phase of crypto oversight
Ahead of MiCAs July 1 deadline, AMLA published an advisory note warning crypto firms about money laundering risks arising from the end of the transitional period. The guidance outlined measures for firms winding down their EU operations and licensed providers onboarding new customers to maintain anti-money laundering controls during the transition.
Szego said AMLA will publish a report before the end of the year on money laundering risks in the crypto sector and supervisory practices across the bloc. She added that the authority is also expanding its blockchain analytics capabilities to strengthen oversight of crypto-asset service providers.
The report will also assess how national authorities supervise crypto-asset service providers and identify differences in supervisory practices across member states.
Szego said AMLA intends to use the findings to coordinate follow-up work with national regulators where needed as it works toward more consistent anti-money laundering oversight across the bloc.
