European Union policymakers reached a preliminary agreement on a comprehensive regulatory package aimed at combating money laundering. Under the Anti-Money Laundering Regulation (AMLR), crypto firms will be mandated to conduct due diligence on their customers. The AMLR addresses issues such as sanctions evasion and money laundering, establishing a single rulebook and a supervisory authority with oversight over the crypto sector.
The European Parliament and Council have approved measures requiring crypto firms to implement “customer due diligence measures for transactions exceeding €1,000 ($1,090).” Additionally, the agreement introduces safeguards for transactions involving self-hosted wallets. This development follows the EU’s prior implementation of Anti-Money Laundering checks on crypto fund transfers and the Markets in Crypto Assets (MiCA) regulation.
The legislative process underwent adjustments, possibly influenced by U.S. sanctions on the crypto anonymizing tool Tornado Cash and concerns about crypto misuse for sanctions evasion by entities like Russia and Hamas. Despite discussions in Parliament, the measures aim to enhance anti-money laundering efforts without prohibiting privacy-enhancing crypto tools.
The EU Crypto Initiative had urged lawmakers to reconsider restrictions on privacy-preservation tools or, alternatively, establish a clear distinction between prohibited anonymous high-risk accounts and high-risk anonymizing instruments.
Belgian Minister of Finance, Vincent Van Peteghem, emphasized that the agreement is integral to the EU’s new anti-money laundering system, enhancing collaboration among national systems to prevent fraud, organized crime, and terrorist financing. The deal awaits formal adoption by the Parliament and Council before becoming effective.
