In a recent Fenergo webinar, ‘Guidance on the Global 2024 Regulatory Changes’, experts delved into the forthcoming regulatory trends for 2024.
The focus was on the anticipated adjustments to anti-money laundering (AML) and know-your-customer (KYC) regulations.
A major point discussed was the introduction of FinCEN’s new Beneficial Ownership Information (BOI) reporting rules under the US Corporate Transparency Act (CTA). These changes will compel financial institutions in the US to revise their beneficial ownership onboarding processes, aligning them with the existing Customer Due Diligence (CDD) rules.
The panel also shed light on the progress towards regulatory harmonization within the European Union. Key developments include the EU’s Sixth Anti-Money Laundering Directive (6AMLD) and the Markets in Crypto-Assets Regulation (MiCA). These regulations are designed to integrate crypto assets within the existing AML/Counter-Terrorism Financing (CTF) frameworks.
There was a unanimous view that the cryptocurrency sector, especially in the wake of major crypto exchange failures, requires more stringent regulation. This is vital for addressing concerns like terrorism financing and sanctions evasion.
Rory Doyle, Principal Regulatory Specialist, emphasized the need to treat cryptocurrency as any other financial product. He stated, “I think it’s about time that we recognize that crypto needs regulation, more than regulation needs crypto…There’s no gray area anymore when it comes to cryptocurrency.”
2024 is shaping up to be a pivotal year for regulatory changes. Financial institutions (FIs) must be prepared for the resource and technology implications to ensure compliance with the evolving regulations. Innovations such as artificial intelligence could play a significant role in streamlining compliance processes, particularly in gathering BOI across various jurisdictions.
Key insights from the discussion include:
- The continuous evolution of AML/KYC and beneficial ownership regulations, particularly in the EU.
- The challenge of cross-border compliance due to updates in regulatory frameworks like the CTA and 6AMLD.
- Increasing scrutiny of cryptocurrencies by regulators, aligning them with existing AML, CTF, and sanctions rules.
- The complexity of obtaining accurate BOI across different jurisdictions, a process that would benefit from automation in FIs.
- The necessity for FIs to allocate sufficient resources and budget for technological advancements as regulations evolve and the demand for suspicious activity reports grows.
Watch the full webinar here.
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