Key Takeaways:
- New EU Regulations for Crypto: The European Parliament approved new anti-money laundering regulations targeting cryptocurrency entities, requiring rigorous identity checks and reporting of suspicious activities.
- MiCA Framework Integration: The regulations fall under the Markets in Crypto-Assets (MiCA) framework, set to be fully enforceable by the end of 2023, affecting crypto-asset service providers and asset managers.
- AMLA’s Role: The newly established Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will supervise the implementation of these regulations, with headquarters in Frankfurt, Germany.
The European Parliament recently endorsed new regulations aimed at combating money laundering within the cryptocurrency sector.
These regulations establish specific due diligence requirements for cryptocurrency companies, ensuring rigorous identity checks for customers and obliging them to report any suspicious activities.
EU's anti-money laundering bill passes final vote, here's what's next for crypto-asset service providers https://t.co/IKKLYfMHgB
— The Block (@TheBlock__) April 24, 2024
Key entities affected include crypto-asset service providers (CASPs), such as centralized crypto exchanges regulated under the Markets in Crypto-Assets (MiCA) framework, as well as various other sectors including gambling services.
The legislation, ratified on April 24, extends its reach to crypto asset managers, who will now face heightened scrutiny.
🏦 European banks are venturing into crypto, incentivized by the regulatory clarity of the MiCA framework.
— Kyrrex (@Kyrrexcom) April 24, 2024
The first comprehensive legal framework for the crypto industry in the EU, MiCA aims to protect investors with stricter transparency and Anti-Money Laundering rules. Major… pic.twitter.com/gtxbXhuOyr
MiCA, introduced by the European Union in June 2023 and set to be fully enforceable by year’s end, is a comprehensive regulatory framework designed to oversee digital assets and their markets.
To facilitate the enforcement of these new rules, the European Union has established the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA).
AMLA will be headquartered in Frankfurt, Germany, and will supervise the application of the new regulations, although the law awaits formal adoption by the Council and publication in the EU Official Journal.
Patrick Hansen, EU strategy and policy director at Circle, commented on the legislative process via a post on X, expressing optimism about the official adoption of the regulations by the Council of the EU, which will take effect three years after their adoption.
In addition to the basic provisions, Hansen highlighted that the requirement for CASPs to adhere to standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures isn’t new.
🇪🇺 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
— Patrick Hansen (@paddi_hansen) April 24, 2024
EU regulations already mandate compliance with these standards for all crypto exchanges and custodial wallet providers.
Furthermore, the European Parliament has recently revised the proposed AML regulations, dropping the 1,000-euro limit on cryptocurrency payments from self-hosted wallets, reflecting a more flexible approach influenced by industry advocacy.
4/ The AMLR will apply to all CASPs (exchanges, brokers etc.) that are regulated under MiCA. These CASPs will need to follow standard KYC/AML procedures like customer due diligence (CDD) etc.
— Patrick Hansen (@paddi_hansen) March 24, 2024
This is nothing new, as all crypto exchanges & custodial wallet providers in the EU are… pic.twitter.com/ZN1AsWdBpw
Hansen praised the final version of the regulations as a “positive result” for the cryptocurrency sector, attributing the success to a risk-based strategy that allowed for various options, leading to a consensus.
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