New EU Regulation Targets Money Laundering in Crypto World

EU Passes New Anti-Money Laundering Regulation

The European Union (EU) has formally passed a new anti-money laundering regulation (AMLR), applicable to all crypto-asset service providers (CASPs). The laws aim to provide more powers to Financial Intelligence Units (FIUs) to detect and combat money laundering and terrorist financing.

Impact on Crypto-Asset Service Providers

• The legislation affects crypto exchanges, brokers, and entities regulated under MiCA (Markets in Crypto-Assets Regulation).
• It includes enhanced due diligence measures, requiring obliged entities such as crypto-asset managers to report suspicious activities to FIUs.

According to Patrick Hansen, Circle’s EU Strategy and Policy Director, CASPs will need to perform customer due diligence on users for transactions above €1K, even for occasional transactions.

Establishment of AMLA

A new body, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), will be established in Frankfurt to supervise the implementation of the new legislation.

The Council is yet to formally adopt the law, awaiting publication in the EU’s Official Journal.

Clarifications by Patrick Hansen

Hansen clarified that the AMLR is not specific to crypto but is part of a broader AML/CFT framework applying to all financial institutions, including CASPs.

Under the new law, CASPs are required to follow standard KYC/AML procedures, with existing rules prohibiting services to anonymous users and accounts for privacy coins.

The final version of the law removed restrictions on merchant payments from self-custody wallets, allowing users to make purchases without limitations.