The move may help bring more legitimacy to crypto as an alternative currency
In an effort to combat money laundering, the European Parliament has established new rules requiring cryptocurrency businesses to perform formal due diligence, setting forth clear obligations for these companies.
The recently enacted regulations seek to enhance “due diligence measures and identity checks,” encompassing organizations like crypto asset managers. Moreover, these entities must report any suspicious actions to the relevant authorities.
The new law, approved on April 24, will influence crypto-asset service providers (CASPs), such as centralized crypto exchanges managed by the Markets in Crypto-Assets (MiCA) regulation and many other providers, including the gambling market.
The European Union enacted the MiCA regulatory framework in June 2023 to manage digital assets and their markets. The law will be in full effect by the end of 2024.
The new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) agency will manage and administer the new regulation. AMLA’s headquarters will be in Frankfurt, Germany. However, the Council has yet to formally adopt the law, and it hasn’t been published in the EU Office Journal.
EU strategy and policy director at Circle, Patrick Hansen, conveyed his excitement for the vote in an X post, saying that the package would eventually be adopted by the EU Council and go into effect in three years.
Hansen viewed the revised AMLR as a favorable outcome for the crypto industry, highlighting earlier drafts that implied more rigorous KYC measures on self-custody participants. However, he acknowledged the industry’s efforts in championing a risk-based approach with various options, ultimately steering toward a common understanding.
