EU announces new crypto AML rules

European Union (EU) negotiators have agreed on new anti-money laundering (AML) laws for cryptocurrencies.

The new laws, which were agreed on Wednesday (June 29), are set to encourage crypto firms to undertake vigilant checks on customers’ identities, as part of the latest regulatory tightening.

The rules also require crypto firms to report any suspicious transactions to regulators in a bid to banish money laundering, said the European Parliament and Council in a statement yesterday.

Regulations across the cryptocurrency and decentralized finance (DeFi) sector are not as clear as the regulation across centralized finance.

During the recent CryptoSprint forum led by UK regulator the Financial Conduct Authority (FCA), the topic of DeFi regulation was high on the agenda. Once the new rules are written, crypto assets will be traced similarly to traditional money transfers.

Spanish Green Party lawmaker Ernest Urtasun, who assisted in steering the rules through the European Parliament, said: “The new rules will enable law enforcement officials to be able to link certain transfers to criminal activities and identify the real person behind those transactions.”

A letter, seen by Reuters, was sent to 27 EU finance ministers on April 13. Crypto businesses were said to be asking policymakers to ensure their regulations did not exceed the existing rules set by the Financial Action Task Force on the standards for combating money laundering.

Yesterday, the European Parliament and Council announced the prospective rules would also cover ‘unhosted’ crypto wallets held by those that did not manage a licensed crypto exchange for transactions over 1,000 ($1,044.20) with service providers.

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Updated: 06/30/2022 — 17:00