Do EU Regulations combating Money Laundering and the Financing of Terrorism adequately tackle Crypto

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Do EU Regulations combating Money Laundering and the Financing of Terrorism adequately tackle Crypto

This paper highlights the growing threat of cryptocurrencies being used for the purposes of money laundering and terrorist financing within the EU. Ireland was chosen as the case study for this piece because of the nation’s strong user adoption rate of the technology. Ireland also has the highest level of investment in blockchain businesses, as a percentage of total venture capital in Europe. Therefore, the maintenance of a secure network is paramount to cementing the nation’s status as an international technology hub, as well as to sustain the level of investment the country has become accustomed to. This paper begins by defining the problems of money laundering and terrorist financing and goes on to explain the technologies at issue in a manner which is accessible to the reader. The process of how both criminal and terrorist actors can use this technology to further their interests is presented in detail, with a discussion on what problems may be encountered should sufficient preventative measures not be implemented. The paper highlights the issues with the current legislative and enforcement frameworks and identifies three core failure. Finally, the effectiveness of the new EU Anti-Money-Laundering Directive is examined and a possible solution to the aforementioned core failures is offered.

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