May 23, 2024
EU Parliament passes new crypto regulations
Latest Cryptocurrency News

EU Passes New Crypto Regulations to Combat Money Laundering

The European Parliament has recently passed new regulations aimed at enhancing due diligence obligations for cryptocurrency companies, with a particular focus on combating money laundering within the sector.

Strengthening Anti-Money Laundering Measures

The approved laws stress the need for improved “due diligence measures and identity checks” for customers across various entities within the crypto industry. These measures also apply to crypto asset managers, who must now report any suspicious activities to relevant authorities.

Impact on Crypto-Asset Service Providers (CASPs)

The regulations, endorsed on April 24, primarily impact crypto-asset service providers (CASPs) operating under the Markets in Crypto-Assets (MiCA) regulation within the European Union. MiCA, established in June 2023, is a regulatory framework designed to comprehensively oversee digital assets and their associated markets. Under MiCA, centralized crypto exchanges and other entities such as gambling services fall under these new regulations.

Establishment of Regulatory Oversight

A significant aspect of these regulations is the creation of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), tasked with supervising the implementation of the new rules. AMLA’s headquarters will be in Frankfurt, Germany, once the law is formally adopted by the Council and published in the EU Office Journal.

Industry Response and Future Implications

Patrick Hansen, EU strategy and policy director at Circle, highlighted the industry’s anticipation and positive outlook regarding these regulations. He emphasized the necessity for CASPs to adhere to standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, noting that these requirements are not new but part of existing legislation.

Hansen also mentioned the evolution of the regulations, praising the industry’s efforts for advocating a risk-based approach with multiple compliance options, resulting in a consensus-driven final version.

In conclusion, the European Parliament’s approval of these regulations signifies a significant step in regulating the crypto industry within the EU, promoting transparency and accountability while addressing concerns related to illicit activities such as money laundering. The involvement of AMLA and adherence to established KYC/AML procedures are pivotal in ensuring a compliant and secure crypto environment moving forward.

Image by pixabay

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