European Union Passes New Anti-Money Laundering Regulation for Crypto-Asset Service Providers
The European Union (EU) has taken a significant step in the fight against money laundering and terrorist financing by passing a new anti-money laundering regulation (AMLR) that will apply to all crypto-asset service providers (CASPs). This new regulation will give more power to Financial Intelligence Units (FIUs) to detect and combat illicit financial activities.
Under the new laws, crypto exchanges, brokers, and other CASPs regulated under the Markets in Crypto-Assets Regulation (MiCA) will be required to implement enhanced due diligence measures. This means that obliged entities, including crypto-asset managers, must report any suspicious activities to FIUs.
In addition, a new body called the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will be established in Frankfurt to oversee the implementation of the new legislation.
Patrick Hansen, Circle’s EU Strategy and Policy Director, took to Twitter to explain how the new legislation will impact crypto asset service providers in the EU. He clarified that the AMLR is not specifically a crypto regulation but a broad framework that applies to all financial institutions, including CASPs.
While CASPs were already required to follow standard KYC/AML procedures, the new law does introduce some changes. For example, custodial crypto businesses will no longer be able to offer services to anonymous users, and CASPs will be prohibited from providing accounts for privacy coins.
Despite these changes, Hansen noted that the final version of the legislation removed a proposed amendment that would have limited merchant payments from self-custody wallets to €1K. This means that individuals will still be able to use their self-custody wallets for purchasing goods and services in the EU without any restrictions.
Overall, the new AMLR represents a significant step forward in the EU’s efforts to combat money laundering and terrorist financing in the crypto industry. The Council is now awaiting the formal adoption and publication of the law in the EU’s Official Journal.
