The European Parliament has approved new regulations aimed at combating money laundering and illicit activities in the cryptocurrency industry. These regulations, part of the Markets in Crypto-Assets (MiCA) framework introduced by the EU in 2023, particularly impact Crypto-Asset Service Providers (CASPs), including centralized exchanges.
Key highlights of the regulations include the establishment of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) to oversee enforcement, and the imposition of strict Know Your Customer (KYC) procedures on CASPs to prevent money laundering.
Despite concerns, Patrick Hansen, Director of EU Strategy & Policy at Circle, clarified that the Anti-Money Laundering Regulations (AMLR) are not solely focused on cryptocurrencies. However, obligated entities, including financial institutions and CASPs, must adhere to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework.
The regulations also mandate enhanced due diligence measures and identity checks on customers, with obligated entities required to report suspicious activities to financial intelligence units (FIUs) and competent authorities.
While these regulations received strong support in the European Parliament, they have been scaled back from initial proposals that would have had a more significant impact on the crypto sector. Overall, the regulations align closely with existing laws and echo provisions found in the MiCA regulation.
Conclusively, these regulations represent a significant step towards combating money laundering in the cryptocurrency space within the EU, providing a framework for enhanced oversight and enforcement to protect investors and prevent illicit activities.
