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EU expands AML regulation impacting cryptocurrency compliance

EU expands AML regulation impacting cryptocurrency compliance

The European Parliament has approved new laws aimed at bolstering the EU’s anti-money laundering (AML) and terrorist financing efforts, with significant implications for the cryptocurrency sector.

Key provisions of the legislation include enhanced due diligence measures and identity checks for customers. Banks and cryptocurrency asset managers are now required to report suspicious activities to Financial Intelligence Units (FIUs) or other competent authorities, marking a heightened level of scrutiny for the cryptocurrency industry.

Under the new laws, FIUs are granted expanded powers to analyze and identify money laundering and terrorist financing, including the ability to suspend suspicious transactions.

To oversee these regulations, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will be established in Frankfurt. AMLA will supervise high-risk financial entities, address supervisory failures, serve as a central hub for supervisors, and mediate disputes. Additionally, AMLA will oversee the implementation of targeted financial sanctions.

The legislative package includes the sixth AML directive, the EU “single rulebook” regulation, and the AMLA regulation.

Moreover, the laws grant access to beneficial ownership information to individuals with a legitimate interest, such as journalists, civil organizations, competent authorities, and supervisory bodies. This information, held in national registries and interconnected at the EU level, will be accessible for at least five years.

Further provisions of the legislation include enhanced vigilance measures for ultra-high-net-worth individuals (with total wealth exceeding €50,000,000), an EU-wide cash payment limit of EUR 10,000 (except in non-professional private transactions), and measures to ensure compliance with targeted financial sanctions and prevent their circumvention.

 

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