European Union policymakers on Wednesday reached a temporary agreement on parts of a sweeping anti-money laundering regulatory package that would force all cryptocurrency companies to conduct due diligence on their customers.
The European Parliament and the Council (which brings together finance ministers from the bloc's 27 member states) have approved measures, including for cryptocurrency companies to apply “customer due diligence measures when carrying out transactions worth €1,000 ($1,090) or more.”
The deal also adds measures to mitigate risks related to transactions with self-hosted wallets, Wednesday's announcement said.
The European Union last year ended specific anti-money laundering checks on crypto money transfers alongside the landmark Markets in Cryptoassets (MiCA) regulation. In December, the European Parliament and Council agreed to establish a supervisory body to combat money laundering. Wednesday's agreement specifically relates to the EU's Sixth Money Laundering Directive and the rulebook as part of the Anti-Money Laundering Act.
The package may have become tougher as it goes through the EU's complex legislative process in light of US sanctions against cryptocurrency anonymization tool Tornado Cash, as well as concerns about cryptocurrencies being used to evade sanctions by Russia and even Hamas. One of the lawmakers who led discussions on the package in Parliament last year confirmed that the measures would not seek to ban privacy-enhancing cryptocurrencies.
The industry body, the European Cryptocurrency Initiative, urged lawmakers in May 2023 to remove planned restrictions on privacy-preserving tools or, failing that, include “clear delineation between blocked high-risk anonymous accounts and high-risk anonymization tools.”
“This agreement is an integral part of the new EU anti-money laundering regime. It will improve the way national anti-money laundering and terrorist financing systems are organized and work together. This will ensure there is no room for fraudsters, organized crime and terrorists.” “We left to legitimize its revenues through the financial system,” Belgian Finance Minister Vincent Van Petegem said in a press release.
The agreement now needs to be formally approved by Parliament and the Council before it enters into force.
