EU Expands Anti-Money Laundering Laws to Include Cryptocurrency Sector
Summary:
The European Union is set to expand its Anti-Money Laundering and Counter Terrorism Financing law to cover the growing cryptocurrency market. These developments require crypto services companies to confirm customer details and report suspicious activities. All transactions over €1,000 ($1,090) will be subject to checks and risk mitigation measures for self-hosted wallets have been established. Furthermore, the Financial Intelligence Unit has been granted greater powers, and crypto companies now need to scrutinize not just customers but also their products and delivery methods.
A provisional agreement to broaden the EU’s Anti-Money Laundering (AML) and Counter Terrorism Financing law has been reached by the European Union's member states, lawmakers, and the European Commission. This expansion will affect the budding cryptocurrency market extensively. Concerned businesses providing cryptocurrency services will now be obligated to verify their customers' details and report any operations that appear dubious. The new accord mandates that any transaction worth €1,000 ($1,090) or more must be scrutinized. In an effort to mitigate risks associated with personal digital wallets, the interim law has established measures.
Special monitoring systems have been set up for crypto-asset service providers who engage in cross-border transactions. They are also required to closely track the business interactions of high-net-worth individuals. The latest agreement endows the Financial Intelligence Unit (FIU) with additional authority as well, enabling the agency to quickly and easily access vital financial and administrative data like taxation records, fund details, frozen assets linked to financial penalties, and cryptocurrency transfers.
The newly adopted AML law was part of a legislative package put forth on 20 July 2021, known as Markets in Crypto-Assets (MiCA), which will apply to all EU nations. It was designed to bolster the EU's efforts to combat money laundering and financing of terrorism. Prior to being enforced, this law must gain formal approval from the European Parliament and member states.
In other developments, the European Union is refining its financial regulations to prevent money laundering in the cryptocurrency arena. On Jan. 16, the European Banking Authority (EBA) updated its money laundering prevention rules to include cryptocurrency companies. Hence, EU-based crypto businesses must now evaluate their potential participation in financial crimes by closely analyzing their customers, the products they offer, their delivery methods, and their geographical locations.
Published At
1/18/2024 11:48:28 AM
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