EU to Mandate Crypto Companies to Verify Transactions Over €1000

The European Council and the European Parliament have reached a preliminary agreement on certain elements of an anti-money laundering (AML) package. This includes, among other things, mandatory transaction checks by cryptocurrency operators and the requirement to report client transactions to authorities. The official statement was published on the European Council’s website.

The goal of these measures is to protect EU citizens and the financial system from money laundering and terrorist financing, according to the Council’s press service.

Although the EU has long had anti-money laundering rules in place, they have been applied differently in each member state, making it easier for cross-border crime to thrive, European policymakers explain.

Key Provisions of the AML Regulation

The Anti-Money Laundering Regulation (AMLA) is a comprehensive set of measures aimed at combating sanctions evasion and money laundering. It includes the creation of a unified rulebook and the establishment of a supervisory authority that will also oversee the crypto sector.

According to the document, crypto firms will be required to apply “enhanced customer due diligence measures for transactions of €1000 or more.” This will affect all crypto asset service providers (CASPs).

The agreement also includes measures to reduce risks associated with transactions involving self-hosted wallets.

Stricter Rules in Response to Recent Events

The package of measures may have become stricter after a complex legislative process in Europe, especially in light of U.S. sanctions against the crypto anonymization tool Tornado Cash and concerns that cryptocurrencies are being used to evade sanctions by Russia and even Hamas. However, European lawmakers assured last year that these measures are not intended to outlaw privacy-enhancing cryptocurrencies.