The European Parliament has made significant progress in the fight against money laundering, particularly as it relates to the cryptocurrency sector. Two committees within the parliament have recently approved important elements of an extensive legislative package aimed at combating money laundering.
This legislative progress builds upon an agreement reached in January on the Anti-Money Laundering Regulation (AMLR). The AMLR requires crypto service providers to adhere to customer verification protocols and monitor transactions involving self-hosted wallets and cross-border transfers. In addition, the legislation establishes the Anti-Money Laundering Authority (AMLA) which will be headquartered in Frankfurt, Germany.
The Joint Committee on Civil Liberties, Justice, and Home Affairs, along with the Committee on Economic and Monetary Affairs, have voted in favor of establishing the AMLA. The vote was overwhelmingly in favor, with 68 members supporting it and only 10 opposing it. Furthermore, a provisional agreement on the regulation to prevent the financial system from being used for money laundering or terrorist financing was also approved. The vote was 71 in favor, with four abstentions and nine against. These measures, once adopted by the European Union’s 27 member states, will provide a uniform rulebook for implementation across the bloc.
However, there are concerns within the European crypto industry that the rules for crypto service providers may be more stringent than those for traditional financial institutions. While the aim of the regulation is to ensure uniform requirements for all players in the financial sector, there is a need to strike a balance and avoid placing unnecessary burdens on crypto service providers. The newly adopted texts are an important step towards harmonizing the approach to money laundering prevention across the European Union and ensuring compliance with comprehensive verification and monitoring requirements for crypto service providers.
