The European Parliament has passed the long awaited and oft delayed anti-money laundering and counter terrorist financing  (AML/CFT) legislation designed to tighten up the rules for cryptocurrencies and crypto assets.

Under the strengthened rules, entities such as banks and crypto asset managers will face enhanced due diligence requirements.

This includes an obligation to report any suspicious activity to the relevant financial intelligence units (FIUs), specialist bodies set up in 2010 to receive and analyse reports of potential money laundering or terrorist financing.

Under the new law, the FIUs will have increased powers. They will also be assisted by the newly established Authority for Anti-Money Laundering and Countering the Financing of Terrorism (Amla) which will be based in Frankfurt.

The main focus of the legislation is crypto. Crypto asset service providers will now have to implement the same AML rules as banks for transactions of more than €1000, as was proposed in the January draft.

However, the rules will not apply to NFT platforms or decentralised autonomous organisations, for now at least.

The legislation must now be approved by the European Council before it can be enacted. The European Commission will also report to the Parliament at the end of the year on the crypto market and advise as to whether further measures need to be taken in terms of AML requirements.

©2024 fundsTech