In a landmark move, the European Union has provisionally agreed upon a comprehensive anti-money laundering (AML) regulatory package, significantly impacting the crypto industry. This new framework mandates that crypto firms perform thorough customer due diligence for transactions exceeding 1,000 euros. Although this development has been largely accepted by the industry, concerns are rising about the fairness and equity of these regulations compared to traditional financial institutions.
The provisional deal, a result of negotiations between the European Parliament and EU Council, aims to bring crypto firms under a stricter regulatory umbrella. These new requirements include not just enhanced customer verification but also measures targeting transactions involving self-hosted wallets and cross-border transfers.
Despite efforts to ensure parity between crypto firms and banks, industry insiders like Robert Kopitsch from Blockchain for Europe argue that the playing field is not as level as projected. The discord primarily stems from differing thresholds applied to crypto service providers and other financial entities in customer due diligence.
In a significant win for the crypto sector, NFTs and decentralized finance (DeFi) seem to have been excluded from the AMLR’s scope. This decision follows intense lobbying by industry advocates during the legislative process. However, the fate of privacy-enhancing tools, which have been a hot topic post the Tornado Cash sanctions, remains unclear.
Eero Heinaluoma, a member of the European Parliament, emphasized the AMLR’s intent to impose identical obligations on crypto asset service providers and credit institutions. Yet, the reality appears different. Under the new regulations, while all entities must conduct customer checks for transactions above 10,000 euros, the bar is set lower at 1,000 euros for crypto firms and financial institutions.
The industry’s reservations notwithstanding, the alignment of AMLR’s regulatory scope with MiCA and the TFR is seen as a significant achievement. As the EU moves towards finalizing this regulatory package, the crypto sector braces itself for intensive technical discussions and rapid adaptation.