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Tighter regulation in the crypto sector

Tighter regulation in the crypto sector

The European Council and Parliament have tentatively reached an agreement to expand parts of the Anti Money Laundering (AML) and the Prevention of Money Laundering and Financing of Terrorism (AML/CFT) legislation of the European Union to protect the crypto market.

New temporary law

This agreement will apply to most companies in the cryptocurrency industry, meaning that companies offering crypto services must verify and confirm details about their customers. They must also report any suspicious activities. The temporary legislation also includes measures to reduce the risks associated with self-managed wallets.

Regulators have established special checks for providers of crypto services that facilitate transactions across different countries.

A safer crypto sector

The European Union's financial regulator is tightening the rules to combat money laundering in the cryptocurrency world. On January 16, 2024, the European Banking Authority (EBA), which oversees European banks, amended the rules on the prevention of money laundering to also apply to crypto companies.

The provisional AML law is part of a wide range of legislative proposals first proposed on July 20, 2021, known as Markets in Crypto-Assets (MiCa), which will regulate all countries in the EU. Its aim is to strengthen the EU's fight against money laundering and terrorist financing. Before the law can be fully implemented, it must first be adopted by the European Parliament and the member states.