The European Union is reportedly planning to grant a new financial watchdog the responsibility of overseeing the crypto industry’s anti-money laundering and associated risks, per Bloomberg

Per Bloomberg, the initiative is being led by the European Commission, and is expected to begin operating in 2024. 

“It is key that the scope of the new EU authority explicitly includes crypto-assets, given that this is one of the fields more prone to money laundering activities,” said Luis Garicano, a leading EU lawmaker in favor of the proposed move. 

An unnamed EU diplomat told Bloomberg that a group of EU Member States—led by Germany—are pushing for cryptocurrencies to be included more explicitly in the approach. What’s more, the watchdog’s desired remit reportedly captures cross-border entities such as crypto asset service providers. 

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The EU, crypto and money laundering

The proposed EU move comes on the heels of a string of crypto-related criminal offenses in Europe, including money laundering. 

Earlier this year, an investigation by Reuters revealed how German law enforcement and lawyers were collectively contacting crypto exchange Binance over at least €2 million worth of transactions using likely stolen funds. In response, Binance reportedly said it could not help. 

German police also recently asked Binance for help regarding two men who were suspected of assisting an Islamist gunman who killed four in Vienna, Austria. Law enforcement found that one of these men made “unspecified” transactions on Binance. 

Last year, the privacy-focused cryptocurrencies Monero and Dash became embroiled in a missing person case in Norway. Norwegian law enforcement were faced with the challenge of trying to trace transactions made using the anonymity-preserving cryptocurrencies as part of their investigation. 

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Back in 2020, a study by blockchain analytics firm Chainalysis found that Hydra—at the time one of the top crypto markets in Eastern Europe—was actually a darknet market

More recently, British police returned over $5 million to victims of an international crypto scam that spanned not only many European states—but countries including the United States, Australia, and China.

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