Applying EU Anti-Money Laundering Regulations and De-risking Policy on Social Live Streaming Service Platforms and Live-Streamers

Abstract

Live streaming as one of social media activity which brings challenges to financial regulation. This activity involves live-streaming platforms and live streamers where they can obtain revenue from conducting live-streaming. Social Live Streaming Services, in short SLSS, allow their users (live streamers) to broadcast themselves to everyone who wants to watch, all over the world. The streamer films himself with a camera, depending on the service, either on his mobile phone or from a webcam. The consumer sees everything what the streamers do in real time. In context of live-streaming activity in SLSS, personal tokens are the type of transaction tools which being used. Consumer exchange their money into form of tokens, then use these tokens to reward/appreciate the streamers or draw the streamers’ attention. The SLSS Platforms pay the streamers with mediated revenue in the form of tokens. These tokens are a type of digital ownership that enable for brands, influencers, and/or creators including streamers to monetize their creations and services. The multiple transactions which involve real currency transformation into tokens for the consumers communicate with the streamers, and streamers’ tokens monetization process rise potential for money laundering activity. This thesis discuss on how the EU Anti-Money Laundering rules and De-risking policy can be employed to support SLSS platform and streamers' business models while effectively addressing AML risks. Legal-doctrinal research method is used as method to answer this research question. Live streamers are not subject to EU AML rules as they are clearly not obliged entities stated in AML Directive 2015. To facilitate this, Article 4(1) of AML Directive 2015 has given opportunity for Member States to regulate further the scope of the Directive and thus AML rules can be applied. Likewise, SLSS platforms are not subject to EU AML rules as regulated in AML Directive. However, for SLSS platforms which issuing virtual items, tokens, or coins, Market in Crypto-Assets Regulation (MiCAR) rules are applied as they are issuing and offering crypto-assets to be purchased by audience for them to reward live streamers. Furthermore, according to Recital 16 of MiCAR stated that any entities offering services falling within the scope of this MiCAR Regulation should also comply with applicable anti-money laundering and counter-terrorist financing rules of the Union, which integrate international standards. De-risking policy has impactful effect on content monetization process on live streaming activity. As a further result, this policy may preventing live streamers to monetize their virtual items and obscuring monetization feature of SLSS. Furthermore, it may reducing financial transaction in entertainment field. The impact caused by de-risking policy which possess bank internal rules might not relevant with the cycle of live streaming activity, and may bring domino effect in decreasing economic stability. Legislating and applying code of conduct with co-regulation mode and live streaming-focused national spesific regulation for SLSS platforms and live streamers are solutions to tackle drawbacks on EU AML rules compliance in live streaming activity.