EU tightens grip on dirty money as new AML rules target crypto By Investing.com

The European Parliament has approved a new set of laws that introduce stricter due diligence and ID verification requirements for crypto asset managers, who must also report suspicious activities to the relevant authorities.

The legislation targets crypto-asset service providers (CASPs), which include centralized cryptocurrency exchanges and extends to other sectors like gambling services, football clubs, among others.

Passed on Thursday, this package also establishes a unified rulebook for the 27 EU member states and sets up an anti-money laundering authority based in Frankfurt. This new body will supervise the implementation of regulations, focusing on what the EU considers the “riskiest entities.”

The new rules ramp up the scrutiny with tougher due diligence and mandatory identity checks. Banks, asset managers, and both real and virtual estate agents now have to flag any sketchy activities to Financial Intelligence Units and other relevant authorities. Despite these regulations, crypto policy advocates say these rules are tougher on them than on other financial sectors. 

Interestingly, the European Union’s new toolkit does not impose a ban on anonymous crypto wallets and self-custodial payments. Instead, it applies to CASPs already regulated under the MiCA (Markets in Crypto-Assets Regulation), a framework that governs digital assets and came into effect in June 2023.

Furthermore, the legislation grants individuals and organizations with a “legitimate interest”—such as journalists, media professionals, and civil society groups—immediate and unrestricted access to beneficial ownership information. This information will be available in national registries and interconnected at the EU level and includes details about the individuals or entities that own or control companies.

The package was initially agreed upon politically in January, and then went through a joint parliamentary committee vote in March before the final plenary vote. The next step for the package is the formal adoption by the EU Council, which comprises representatives from the member states.