EU Strengthens Anti-Money Laundering Measures for Cryptocurrency

The European Parliament has taken decisive action to combat money laundering and terrorist financing by adopting a comprehensive package of laws. These new regulations significantly enhance the European Union’s ability to tackle financial crimes effectively.

One key aspect of these laws is the provision for immediate and unfiltered access to beneficial ownership information held in national registries. This transparency measure extends to journalists, media professionals, civil society organizations, and competent authorities. Moreover, these registries will now include data dating back at least five years, providing a more comprehensive understanding of financial activities.

Financial Intelligence Units (FIUs) will also receive expanded powers to analyze and detect money laundering and terrorist financing cases. Additionally, they will be empowered to suspend suspicious transactions promptly.

The legislation imposes enhanced due diligence measures on obligated entities, such as banks, asset managers, and crypto asset managers. These entities are now mandated to report any suspicious activities to FIUs and other competent authorities. Notably, top-tier professional football clubs involved in high-value financial transactions will also be subject to these requirements.

To oversee the implementation of these new rules, a new authority, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), will be established in Frankfurt. AMLA will play a pivotal role in supervising the riskiest financial entities, intervening in cases of supervisory failures, and mediating disputes between supervisors.

The legislative package, consisting of the sixth Anti-Money Laundering (AML) directive, the EU “single rulebook” regulation, and the Anti-Money Laundering Authority (AMLA) regulation, has been adopted by the European Parliament with overwhelming support.

In parallel with these measures, the European Parliament has also approved regulations specifically targeting cryptocurrency activities. The regulations aim to enhance due diligence measures and identity checks for customers of cryptocurrency service providers. These obligations will apply to crypto asset service providers (CASPs) operating under the Markets in Crypto-Assets (MiCA) regulation.

Under MiCA, CASPs will need to adhere to standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, including customer due diligence. This requirement aligns with existing regulations governing crypto exchanges and custodial wallet providers in the EU.

The enactment of these regulations marks a significant step forward in the EU’s efforts to combat financial crimes and ensure the integrity of its financial system. By implementing robust anti-money laundering measures, the EU demonstrates its commitment to safeguarding the integrity and stability of the financial markets.