Cristian Lipciuc
EU Tightens Regulations Regarding Crypto Transactions, Citing AML Concerns
The EU Parliament and Council recently reached a provisional agreement on a list of anti-money laundering and anti-terrorist financing laws. Although further deliberation on other proposed measures is yet to be had, the new measures will help streamline the efforts of the national financial agencies of EU countries in this area.
Although cryptocurrencies are not the main focus of the new laws, the industry is nonetheless explicitly targeted by several of the provisions.
Increased Reporting on Crypto Revenues
In recent years, several crypto-related companies have taken steps to move some or all of their activities to the European Union, citing a more concise regulatory framework than in the US, where the SEC is serving a slew of lawsuits and refrains from clarifying how to avoid them.
Since a framework is already provided in the EU, officials have now expanded it to prevent financial crimes within Europe and outside of it.
Probably the most granular provision within the new packet is the new obligation of crypto companies to conduct due diligence for any digital asset transaction worth more than 1,000 EUR.
“The new rules will cover most of the crypto sector, forcing all crypto-asset service providers (CASPs) to conduct due diligence on their customers. […] According to the agreement, CASPs will need to apply customer due diligence measures when carrying out transactions amounting to €1000 or more. It adds measures to mitigate risks in relation to transactions with self-hosted wallets.”
Similar rules have also been imposed on traders of luxury goods and, in typical European fashion, on football clubs and agents.
Enhanced due diligence procedures will further single out individuals with high net worth, imposing identity verifications on those who make cash transactions worth between 3k and 10k EUR.
Furthermore, similarly stringent verification protocols will be applied to any transfers to and from “high-risk third countries” whose legislations regarding terrorism and financial crimes are deemed to be lacking.
Info Gathered Locally, Centralized at EU Level
Going forward, the financial intelligence units of each EU country will now have “immediate and direct” access to all information – financial and otherwise – pertaining to the above measures.
Although the decision to act on said intel will remain in the purview of the local FIUs, these agencies will nevertheless submit relevant information to European authorities, allowing for better prevention of financial crimes at a transnational level.
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