European Parliament Enacts Strict Crypto AML Regulations
- The European Parliament passed new regulations imposing due diligence obligations on cryptocurrency companies to strengthen AML efforts.
- Under the new rules, crypto-asset service providers will be required to ensure full traceability of crypto-asset transfers, adhering to stringent AML standards and facing oversight similar to traditional financial institutions.
The European Parliament approved new regulations that establish formal due diligence obligations for cryptocurrency companies to combat money laundering.
Alexandra Jour-Schroeder, Deputy Director-General for the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union, states in a report that from an anti-money laundering (AML) perspective, the regulations mandate full traceability of all crypto-asset transfers within the EU, require adherence to global AML standards by crypto-asset service providers and call for rigorous oversight akin to that of banks and other financial institutions.
Additionally, crypto-asset service providers that are significantly active in the internal market and face higher risks might come under the direct supervision of the forthcoming AML Authority (AMLA).
Patrick Hansen, Director, EU Strategy & Policy at Circle, has also expressed his taking on the same on X (formerly Twitter).
🇪🇺 Update: As expected (see tweet #18 of the thread below), 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… https://t.co/BtubbC2u5A
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He wrote 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 (~Summer 2027).
Moreover, back in March, Hansen posted an extensive thread on X detailing the EU Anti-Money Laundering Regulation (AMLR) and its implications for crypto in the EU.
1/ Yesterday was a prime example of why crypto Twitter (and often crypto media) should not be trusted when it comes to crypto policy. Let's debunk claims that the EU is banning anonymous crypto transactions or self-custodial wallets.
— Patrick Hansen (@paddi_hansen) March 24, 2024
Here is what’s actually in the EU Anti Money… pic.twitter.com/dsNZQzl9Mx
He clarified that the AMLR is not specifically a crypto regulation but a broad anti-money laundering/counter-financing of terrorism (AML/CFT) framework applicable to institutions known as "obliged entities" (OEs). This includes all financial institutions like crypto-asset service providers (CASPs), as well as non-financial entities such as football clubs and gambling services that are susceptible to AML/CFT risks.
Edited by Harshajit Sarmah
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