EU Provisionally Agrees Tougher AML Rules for Crypto Firms

By Stephen Graves

The EU Council and Parliament has reached a provisional agreement on parts of an anti-money laundering (AML) package that would require crypto firms to follow stricter due diligence requirements.

In a statement, the European Council said that the new rules will cover "most of the crypto sector," requiring crypto-asset service providers (CASPs) to conduct due diligence on customers carrying out transactions of €1,000 or more. The rules also include measures to "mitigate risks in relation to transactions with self-hosted wallets," the announcement said.

CASPs will also be required to conduct enhanced due diligence on cross-border correspondent relationships as part of the rules.

Another provision establishes an EU-wide maximum limit of €10,000 for cash payments, which the Council claims "will make it harder for crimials to launder dirty money." Businesses will also be required to identify and verify the identity of individuals carrying out occasional cash transactions between €3,000 and €10,000.

The deal will now be finalized and presented to the European Parliament for approval. "If approved, the Council and the Parliament will have to formally adopt the texts before they are published in the EU’s Official Journal and enter into force," the statement read.

The provisional agreement comes as part of the EU's sixth Anti-Money Laundering directive and the EU single rulebook regulation. Lead MEP on behalf of the ECON Committee Luděk Niedermayer said in a statement that, "We will close the plethora of loopholes that exist and which make life far too easy for money launderers." He added that, "In [the] digital age we must also make sure that data are available quickly and can be processed effectively."

Last year, the EU passed the Markets in Crypto Assets (MiCA) legislation, a wide-ranging legal framework that imposes a unified approach to crypto asset regulation across all 27 member states. Among its provisions, MiCA establishes clear rules for CASPs, requiring them to adhere to common standards regarding security and AML protections.

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