Europe tightens crypto regulations with new anti-money laundering laws News โธ EU โธ Regulation
Europe tightens crypto regulations with new anti-money laundering laws
Europe's crypto ecosystem braces for impact as new stringent AML regulations signal tighter KYC norms and oversight.
2 min read
Updated: Apr. 25, 2024 at 12:09 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto Asset Service Providers (CASP) in Europe would have to implement stringent Know Your Customer (KYC) procedures to combat money laundering following the European Parliament greenlight of new Anti-Money Laundering Regulations (AMLR), according to an April 24 statement.
According to the statement:
“The new laws include enhanced due diligence measures and checks on customersโ identity, after which so-called obliged entities (e.g. banks, assets and crypto assets managers or real and virtual estate agents) have to report suspicious activities to FIUs and other competent authorities.”
The law also incorporates non-financial sectors prone to money laundering or terrorist financing, such as gambling and sports clubs.
Under the AML, a new regulatory body called the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will oversee and enforce compliance with the revamped protocols.
Notably, this development chiefly impacts centralized exchanges under the EU’s Markets in Crypto Assets (MiCA) umbrella.
MiCA is crucial legislation for the crypto sector in Europe and offers essential regulatory clarity for this burgeoning industry. Market observers have argued that this framework highlights the region’s acknowledgment of the sector’s potential. MiCA was enacted in June 2023 and would become enforceable by the end of this year.
Expected outcome
Patrick Hansen, the EU Strategy and Policy Director for Circle, pointed out that the outcome of the votes was expected, adding that:
“As expected, the EU Parliament plenary passed the new AML package, including the AML Regulation with 479 votes in favour, 61 against, and 32 abstentions. The package will now be formally adopted by the Council of the EU as well and enter into application 3 years later.”
In a separate post, Hansen emphasized that the regulations largely mirror existing anti-money laundering laws, echoing provisions from the MiCA regulation banning privacy coins and the Transfer of Fund Regulation (TFR).
Notably, initial proposals threatening the crypto sector were scaled back. These included proposals to cap self-custody payments at โฌ1,000 and subject decentralized autonomous organizations (DAOs), DeFi, and non-fungible token (NFT) platforms to AMLR obligations.
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Posted In: EU, Regulation
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.
Patrick Hansen is a Director, EU Strategy and Policy Advisor at Circle, a global financial technology firm that enables businesses of all sizes to harness the power of digital currencies and public blockchains for payments, commerce and financial applications worldwide..