The European Union has taken a significant step towards enhancing anti-money laundering (AML) measures in the cryptocurrency sector by provisionally agreeing on stricter regulations for cryptocurrency firms. These new rules, which were announced on Thursday, aim to strengthen the fight against money laundering and terrorist financing in the cryptocurrency industry.
Under the new regulations, cryptocurrency firms will be required to conduct more thorough customer due diligence (CDD) checks, particularly for transactions exceeding €1,000 ($1,090). This stricter scrutiny is intended to ensure that cryptocurrencies are not used for illicit purposes. The regulations also specifically address self-hosted wallets, which are managed by individuals rather than cryptocurrency companies.
The provisional agreement between the European Council and Parliament is not yet final and requires approval from the European Parliament before it can be adopted officially. Once this approval is granted, the Council and Parliament will need to publish the regulations, which will then come into effect.
The European Banking Authority (EBA) also took action on Tuesday by extending its guidelines on money laundering and terrorist financing risk factors to encompass the cryptocurrency sector. This expansion aligns with the EU’s broader efforts to combat financial crimes and protect the integrity of the financial system.
“These new rules are a key part of our plan to fight against money laundering and terrorist financing,” stated Vincent Van Peteghem, the Finance Minister of Belgium. “Our goal is to ensure that criminals and terrorists cannot use the financial system to hide their illegal money.”
Last year, the EU passed the Markets in Crypto Assets (MiCA) regulation, which established a comprehensive framework for the regulation of cryptocurrencies in the bloc. The newly agreed-upon AML measures complement MiCA and further strengthen the EU’s approach to regulating the cryptocurrency sector.
These developments demonstrate the EU’s commitment to a robust and effective regulatory framework for cryptocurrencies, one that balances innovation and consumer protection with the need to combat illicit financial activities. As the cryptocurrency industry continues to grow, we can expect to see further regulatory developments from the EU and other jurisdictions around the world.
