New Regulations for Crypto Asset Service Providers
According to an agreement between the European Union (EU) Council and Parliament, crypto asset service providers (CASPs) will now be required to conduct due diligence on their customers. This means that CASPs must verify the facts and information of users whose transactions exceed $1,090 or €1000.
The Council of the EU stated that this due diligence is aimed at mitigating risks associated with transactions involving self-hosted wallets. CASPs will join the list of obliged entities, which already includes banks, casinos, real estate agencies, and asset management services.
Belgian Finance Minister Supports Stricter Rules
The Belgian Finance Minister, Vincent Van Peteghem, welcomed the proposed changes, stating that they will enhance the EU’s anti-money laundering efforts. He believes that these measures will prevent fraudsters, organized crime, and terrorists from using the financial system for money laundering.
Under the agreement, traders of luxury cars, airplanes, yachts, and cultural goods, as well as professional football clubs, will also be classified as obliged entities. However, EU members have the option to remove the football sector from this classification if they consider it to be a low risk.
New Cash Payment Limit and Requirements
As part of the agreement, EU members will be required to impose a cash payment limit of nearly $11,000 to make it more difficult for criminals to launder money. Additionally, obliged entities will need to identify and verify the identity of individuals conducting cash transactions between €3,000 and €10,000.
The council’s statement also highlighted the responsibilities of member states’ financial intelligence units (FIU), granting them immediate access to financial, administrative, and law enforcement information. This includes data related to crypto transfers, national motor vehicles, and customs.
Approval Process for the Agreement
Following the agreement between the Council and Parliament, the provisional agreement will now be presented to member states’ representatives and the EU for approval.
Hot Take: Stricter Regulations Aim to Combat Money Laundering through Crypto
The European Union’s provisional agreement on stricter rules for crypto asset service providers demonstrates its commitment to combating money laundering and terrorism financing. By expanding the list of obliged entities to include CASPs and imposing due diligence requirements, the EU aims to mitigate the risks associated with self-hosted wallets in the crypto industry. Additionally, the introduction of a cash payment limit and the obligation for obliged entities to verify the identity of individuals conducting large cash transactions further strengthen the EU’s efforts to prevent money laundering. The agreement will undergo an approval process before becoming official, but it signals a significant step towards creating a safer and more regulated crypto landscape in Europe.
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