EU Parliament Targets Crypto in New Anti-Money Laundering Push

Key Takeaway

• EU Parliament approves new anti-money laundering laws targeting crypto firms, large cash payments, and football clubs.
• A Frankfurt-based authority will oversee the implementation, focusing on "riskiest entities" with enhanced due diligence measures.
• New rules grant journalists and civil society organizations direct access to beneficial ownership information in national registries.

EU Tightens AML Laws

The European Parliament has taken a significant step forward in the fight against money laundering and terrorist financing by voting to adopt a comprehensive package of laws. This legislative package aims to enhance due diligence measures, enforce stricter checks on customer identities, and mandate the reporting of suspicious activities across various sectors, including crypto firms. The laws are designed to create a unified rulebook for the 27 EU member states and establish an anti-money laundering authority based in Frankfurt to oversee the riskiest entities.

Crypto Firms Under Scrutiny

Crypto-asset service providers (CASPs), such as centralized exchanges, are among the entities that will be directly impacted by the new regulations. The European Parliament's decision to include crypto firms in the enhanced due diligence requirements has sparked concerns among crypto policy watchers. They argue that the obligations imposed on digital assets may be disproportionately strict compared to those applied to other financial sectors. Patrick Hansen, Circle's EU Strategy and Policy Director, expressed that the final version of the law is a "great outcome" for the crypto industry, highlighting that it adopts a risk-based approach rather than imposing overly stringent measures.

Access to Beneficial Ownership Information

A notable aspect of the new measures is the provision for "immediate, unfiltered, direct and free access" to beneficial ownership information for individuals or entities with a legitimate interest. This includes journalists, media professionals, civil society organizations, and other competent authorities. The aim is to enhance transparency and accountability by making it easier to identify the individuals or entities that own or control companies. This move is expected to play a crucial role in preventing money laundering and terrorist financing by shedding light on the true ownership of businesses.