European Council and Parliament Reach Agreement on Stricter Anti-Money Laundering Rules
The European Council and Parliament have recently announced a provisional agreement on a new anti-money laundering package aimed at safeguarding EU citizens and the financial system. This agreement aims to harmonize rules across the EU and close any potential loopholes that could be exploited by criminals.
Impact on the Crypto Sector
The new agreement will have significant implications for the crypto sector. The list of obligated entities will expand to include traders of luxury goods, professional football clubs, agents, and crypto service providers. This means that all crypto-asset service providers (CASPs) will be required to conduct due diligence on their customers.
To mitigate risks associated with transactions from self-hosted wallets, CASPs must apply due diligence measures for transactions of €1000 or more. Additionally, enhanced measures will be implemented for cross-border correspondent relationships involving crypto-asset service providers.
Measures Against High-Risk Third Countries
The agreement also addresses high-risk third countries by requiring all obligated parties to apply due diligence measures for transactions and business relationships involving these countries. High-risk third countries are defined as those with inadequate anti-money laundering and counter-terrorism regimes that pose a threat to the EU’s internal market.
Access to Financial Information
The Financial Intelligence Unit (FIU) will have immediate and direct access to financial, administrative, and law enforcement information under the new rules. This includes information on funds transfers and crypto transfers.
EU’s Ongoing Efforts Against Money Laundering
The EU has been actively working on regulating crypto services and implementing comprehensive rules for the sector. The Markets in Crypto-Assets (MiCA) regulation came into force in June 2023 and will be fully applied by December 2024. This regulation aims to maintain financial stability and protect investors in EU countries.
The implementation of the AML provision agreement is expected to enhance the EU’s efforts against money laundering and the financing of terrorist organizations. According to Belgian Minister of Finance Vincent Van Peteghem, this agreement will leave no space for fraudsters, organized crime, and terrorists to legitimize their proceeds through the financial system.
Hot Take: Stricter Anti-Money Laundering Rules Set to Impact Crypto Sector
The European Council and Parliament have reached a provisional agreement on new anti-money laundering rules aimed at protecting EU citizens and the financial system. The agreement will have far-reaching implications for the crypto sector, with expanded obligations for crypto service providers and increased due diligence requirements. These measures are part of the EU’s ongoing efforts to regulate crypto services and combat money laundering. By harmonizing rules across the EU, closing loopholes, and introducing enhanced measures for high-risk third countries, the EU aims to strengthen its fight against illicit activities. The implementation of these stricter rules will play a crucial role in maintaining financial stability and safeguarding investors in the rapidly growing crypto industry.
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