Connect with us

Published

on

The European Union’s financial regulatory landscape is in flux with the introduction of multiple Anti-Money Laundering (AML) directives and related laws. These regulations, although designed to protect the financial system, come at a hidden, and sometimes steep, cost to consumers and financial institutions alike. It’s imperative to understand their wider implications, and to question whether the costs — both monetary and ethical — are simply too high.

To name just a few, the AML Directive 5, MiCa and the Transfer of Funds Regulation have reshaped the European financial framework. These laws mandate a rigorous monitoring system. However, the depth and breadth of these regulations are unparalleled in their scope. One cannot help but wonder if such comprehensive oversight is truly sustainable in the long run Banks, crypto asset managers, and even sports clubs now face complex due diligence processes, requiring them to verify customer identities, assets, and transaction patterns. With the Financial Action Task Force (FATF) Travel Rule and equivalents of the Foreign Corrupt Practices Act in play, data collection, sharing, and monitoring become increasingly invasive. This begs the question: to what extent should the quest for security compromise the sanctity of personal data?

For many, this extensive scrutiny spells the end of financial privacy. While it’s undeniably crucial to deter criminal activities, these measures have begun encroaching upon personal freedoms. This isn’t just a minor inconvenience; it signifies a broader shift in the social contract of trust and transparency between citizens and institutions. Consider, for instance, the public accessibility mandate for beneficial owners of corporate entities. Suddenly, individuals and businesses lose control over their financial confidentiality, an unsettling consequence for a region that prides itself on individual rights and privacy. Such drastic changes necessitate a rigorous debate on the ethical implications involved.

Related: How will CBDCs be used for political oppression in your country?

The unforeseen costs of these regulations are burdensome. Financial institutions bear the brunt of technology upgrades, intensive man-hour investments and processes that have been revamped. This not only hampers their agility in a fast-evolving market but also deters potential new entrants from contributing to the financial ecosystem. Unfortunately, these overheads don’t vanish into thin air. They trickle down, affecting consumers in the form of higher fees and limited financial product offerings. In essence, the common man pays a tangible price for these regulatory shifts. Such economic ramifications must be weighed against the purported benefits of these regulations.

What’s even more concerning is that despite these hefty regulations, monumental regulatory failures persist. Big names like HSBC, Danske Bank, and FTX have been associated with regulatory controversies. It’s distressing to observe that even with such stringent rules, large-scale oversights still occur. The juxtaposition of strict regulations with glaring lapses presents a paradox that warrants thorough introspection. It poses a daunting challenge: if these behemoths, with their vast resources, falter, what hope do smaller entities have in navigating this regulatory maze? This naturally leads to skepticism. Are these regulations genuinely effective, or are they mere symbolic gestures, inconveniencing businesses and consumers alike without ensuring the intended foolproof security?

Related: Worldcoin is making reality look a lot like Black Mirror

Europe’s intentions are undoubtedly noble. In a world of increasing cyber threats and financial crimes, protective measures are essential. Yet, the path to safety shouldn’t undermine the values we hold dear. With every stride towards security, we must be cautious not to tread upon the tenets of personal liberty. But it’s equally crucial to ensure that these protective walls don’t become stifling cages. A fine balance must be struck between security and freedom, costs and benefits. As Europe pioneers this journey, it has the responsibility of crafting a model that other regions can emulate without reservations.

Europe’s evolving financial regulatory framework requires a closer examination. Not just from a legal or economic perspective, but from an ethical standpoint. The choices made today will shape the future of finance in the region, setting precedents that could reverberate globally. Personal privacy is a cherished right, and it’s imperative that it doesn’t become an inadvertent casualty in the quest for financial security. The ultimate challenge lies in harmonizing these conflicting demands, creating a landscape where safety doesn’t overshadow freedom. Only by achieving this equilibrium can Europe truly champion a regulatory model that stands the test of time.

George Basiladze is the co-founder and CEO of Wert, a fintech company dedicated to creating products that expand fiat payment access to crypto. He previously co-founded Cryptopay, a Bitcoin wallet. Before fintech, he held analyst roles at companies including NordWest Energy and Evli Bank PLC, accumulating years of experience in the financial and tech sectors. He graduated from the University of Exeter and the Higher School of Economics. Based in Estonia, he has consulted for firms navigating European AML regulations. (Disclaimer: George has direct involvement with fintech companies that could be influenced by European AML regulations.)

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Continue Reading

Politics

White House reportedly mulling pardon for Binance founder CZ

Published

on

By

White House reportedly mulling pardon for Binance founder CZ

White House reportedly mulling pardon for Binance founder CZ

Binance co-founder Changpeng Zhao said that being considered for a presidential pardon from Trump would be “great news if true.”

Continue Reading

Politics

US and China soften trade rhetoric, giving analysts hope of market rebound

Published

on

By

US and China soften trade rhetoric, giving analysts hope of market rebound

US and China soften trade rhetoric, giving analysts hope of market rebound

Tensions between the two countries appear to have cooled off on Sunday, as representatives from both sides signal a willingness to negotiate.

Continue Reading

Politics

Fears Trump may lose focus after praise for Gaza peace deal at Egypt summit

Published

on

By

Britain has been playing a role behind the scenes of Trump's deal between Israel and Hamas | Beth Rigby

Sir Keir Starmer will on Monday join world leaders at a historic summit in Egypt to witness the signing of the Gaza peace plan to end two years of conflict, bloodshed and suffering, that has cost tens of thousands of lives and turned Gaza into a wasteland.

Travelling over to Egypt, flanked by his national security advisor Jonathan Powell, the prime minister told me it was a “massive moment” and one that is genuinely historic.

US President Donald Trump moved decisively last week to end this bloody war, pushing Israeli Prime Minister Benjamin Netanyahu and Hamas into a ceasefire as part of his 20-point peace plan.

Pic: AP
Image:
Pic: AP

In the flurry of the following 48 hours, Mr Starmer and another twenty or so leaders were invited to Egypt to bear witness to the signing of this deal, with many of them deserving some credit for the effort they made to bring this deal around, not least the leaders of Qatar, Egypt and Turkey, who pressed Hamas to sign up to this deal.

On Monday, the remaining 20 living hostages are finally set to be released, along with the bodies of another 28 who were either killed or died in captivity, and aid is due to flow back into a starving Gaza.

Some 1,200 Israelis were killed on 7 October 2023, with another 250 taken hostage. In the subsequent war, most of Gaza’s two million population has been displaced. More than 67,000 Gazans have been killed, according to Palestinian health officials

Then, the signing ceremony is due to take place on Monday afternoon in Sharm el-Sheikh. It will be a momentous moment after a long and bloody war.

More on Israel-hamas War

But it is only just the beginning of a long process to rebuild Gaza and try to secure a lasting peace in the region.

The immediate focus for the UK and other nations will be to get aid into Gaza with the UK committing £20m on Monday for water, sanitation and hygiene services for Gazans.

Please use Chrome browser for a more accessible video player

Humanitarian aid rolls into Gaza

But the bigger focus for the UK and other European allies is what happens after the hostages are released and Israel withdraws its troops.

Because what happens next is a much bigger and more complicated task: rebuilding Gaza; turning it into a terrorist-free zone; governing Gaza – the current plan is for a temporary apolitical committee; creating an international stabilisation force and all the tensions that could bring about – which troops each side would allow in; a commitment for Israel not to occupy or annex Gaza, even as Netanyahu makes plain his opposition to that plan.

The scale of the challenge is matched by the scale of devastation caused by this brutal war.

The prime minister will tomorrow set out his ambition for the UK to play a leading role in the next phase of the peace plan.

Back home the UK is hosting a three-day conference on Gaza’s recovery and reconstruction.

Last week, France hosted European diplomats and key figures from Middle Eastern countries, Egypt, Jordan, Saudi Arabia and Qatar and later this week, the German chancellor is hoping to organise a conference on the reconstruction of Gaza with the Egyptians.

But in reality, European leaders know the key to phase two remains the key to phase one: and that’s Donald Trump.

As one UK figure put it to me over the weekend: “There is lots of praise, rightly, for the US president, who got this over the line, but the big challenge for us post-war is implementing the plan. Clearly, Arab partners are concerned the US will lose focus”.

The prime minister knows this and has made a point, at every point, to praise Mr Trump.

Bridget Phillipson and Mike Huckabee. Pics: Sky/AP
Image:
Bridget Phillipson and Mike Huckabee. Pics: Sky/AP

His cabinet minister Bridget Phillipson learned that diplomatic lesson the hard way on Sunday when she was publicly lambasted by the US ambassador to Israel Mike Huckabee for suggesting to my colleague Trevor Phillips that the UK “had played a key role behind the scenes” and failed to mention Mr Trump by name.

“I assure you she is delusional,” tweeted Governor Huckabee. “She can thank @realDonaldTrump anytime just to set the record straight”.

On Monday, leaders will rightly be praising Mr Trump for securing the breakthrough to stop the fighting and get the remaining hostages home.

People hug next in Hostages Square. Pic: Reuters
Image:
People hug next in Hostages Square. Pic: Reuters

But this is only the beginning of a very long journey ahead to push through the rest of the 19-point plan and stop the region from falling back into conflict.

Britain has, I am told, been playing a role behind the scenes. The PM’s national security adviser Mr Powell was in Egypt last week and has been in daily touch with his US counterpart Steve Witkoff, according to government sources. Next week the King of Jordan will come to the UK.

Part of the UK’s task will be to get more involved, with the government and European partners keen to get further European representation on Trump’s temporary governance committee for Gaza, which Tony Blair (who was not recommended or endorsed by the UK) is on and Mr Trump will chair.

The committee will include other heads of states and members, including qualified Palestinians and international experts.

As for the former prime minister’s involvement, there hasn’t been an overt ringing endorsement from the UK government.

It’s helpful to have Mr Blair at the table because he can communicate back to the current government, but equally, as one diplomatic source put it to me: “While a lot of people in the Middle East acknowledge his experience, expertise and contact book, they don’t like him and we need – sooner rather than later – other names included that Gulf partners can get behind.”

On Monday it will be the US, Egypt, Qatar and Turkey that sign off on the peace plan they directly negotiated, as other Middle Eastern and European leaders, who have flown into Sharm el-Sheikh to bear witness, look on.

But in the coming days and weeks, there will need to be a big international effort, led by Mr Trump, not just to secure the peace, but to keep it.

Continue Reading

Trending