Adoption of new regulations across the European Union (EU) - Enhanced Rules on Cryptocurrencies
What happened?
📅 On Thursday, 18/01/2024, the European Council and Parliament provisionally agreed on anti-money laundering (AML) rules specifically targeting cryptocurrencies.
We have identified many of these points as essential which are outlined below:
Customer Due Diligence (CDD) Measures:
- Exchanges and wallet providers must now apply CDD for transactions of €1000 or more.
- Verification and reporting of suspicious activities are now mandatory.
- Applies to transactions originating from conventional financial institutions as well as self-hosted crypto wallets.
Cash Payments:
- The EU-wide cash payment limit is now set at €10,000 to combat money laundering.
- Member states have the flexibility to impose a lower limit.
- Obliged entities must identify and verify individuals in occasional cash transactions between €3,000 and €10,000.
Enhanced Due Diligence for Cross-Border Transactions:
- Cross-border correspondent relationships that involve crypto-asset service providers (CASPs) will undergo heightened due diligence.
- Acknowledgment of the distinct risks linked with international transactions in the cryptocurrency space.
Financial Intelligence Units (FIUs):
- FIUs immediately obtain access to a wide array of data, encompassing tax information, funds, and cryptocurrency transfers.
- The FIU.net system has undergone an upgrade to facilitate quicker dissemination of reports.
- Close cooperation in cross-border cases.
AML Authority:
- Establishment of the AML Authority as a specialized supervisory body responsible for overseeing money laundering (ML) and terrorist financing (TF) safeguards in the EU Financial System.
Expanded List of Obliged Entities:
- The recent regulations encompass a significant portion of the cryptocurrency sector, requiring all Crypto-Asset Service Providers (CASPs) to perform due diligence on customers.
- Verification and reporting of suspicious activity are now mandatory.
Beneficial Ownership:
- Harmonized and transparent rules on beneficial ownership.
- Ownership and control elements are assessed to identify every beneficial owner.
- Threshold set at 25% ownership.
- Clarifications on multi-layered ownership and control structures.
High-Risk Third Countries:
- Enhanced due diligence for transactions involving high-risk third countries.
- Justification for additional countermeasures at the entity or member state level.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.