After months of debate over how to prevent cryptocurrencies, non-fungible tokens (NFT), and the metaverse from being exploited for financial crime, the European Parliament’s Economics and Civil Liberties Committees are scheduled to vote on new anti-money laundering (AML) policies on Tuesday. To stop money laundering and terrorism funding, European Union legislators have endorsed a new draught rule putting a maximum of 1,000 euros ($1,083) on anonymous cryptocurrency transactions.
The transaction would be permitted if the customer’s identity could be confirmed or if a regulated crypto provider was engaged. The law’s original draft was harsher, but on March 22, internal discussions resulted in changes to the language.
In a plenary meeting scheduled for April, the Anti-Money Laundering and Countering the Funding of Terrorism package will be approved. Following that, talks will start to determine how the legislation would ultimately look. Emil Radev, co-rapporteur for the AMLA says, “For us, it is important that the new authority cooperates very closely with national supervisors and that it directly supervises the riskiest cryptocurrency asset service providers and companies in the financial sector that operate in several member states.”
The Markets in Crypto Assets Regulation (MiCA) bill was approved by the EU Parliament in March 2022 to establish a common stance on cryptocurrencies across all EU member states. Enhanced checks per the EU AML framework must be implemented by cryptocurrency asset service providers whose parent firm is based in nations established on the EU list of third countries deemed to be at high risk for anti-money laundering operations.
According to the recently accepted draft, presenting the measure will need increased compliance and transparency, especially from crypto asset managers. It is also added in the draft that presenting the measure will need increased compliance and transparency, especially from crypto asset managers. The bill states that “Entities, such as banks, assets and crypto assets managers, real and virtual estate agents, and high-level professional football clubs, will be required to verify their customers’ identity, what they own, and who controls the company.”
With the European Central Bank’s (ECB) role and two industry levels, the EBF envisaged a three-tiered architecture for the digital euro. Interacting with the Single Euro Payments Area will be the ECB’s responsibility, with the private sector later creating and running “Industry Level B.”
Reflecting on the intentions of the parliament, any foreign provider who is not registered or licensed anywhere would not be permitted to have a correspondent connection with any EU cryptocurrency providers. Decentralised autonomous organisations (DAOs), to the degree they are managed by an identifiable person, and NFT platforms are also subject to the money laundering regulations under the recommendations.