- The EU is adopting a tougher stance on crypto regulation.
- EU lawmakers have provisionally agreed to force crypto firms to conduct customer due diligence.
- The proposal has yet to be presented to the EU parliament.
In the relentless pursuit of regulating the crypto industry and safeguarding its investors, the European Union is intensifying efforts and adopting a stricter stance on digital assets. Aimed at providing a more transparent regulatory framework and combatting illicit activities like money laundering and terror financing, EU lawmakers have introduced a new proposal that could reshape how users across the continent interact with and transact in cryptocurrencies.
EU Agrees to Force Crypto Firms to Check on Customers
On Wednesday, January 17, the European Council and Parliament reached a major provisional agreement aimed at reshaping the crypto industry in the region by imposing stricter rules for firms, specifically to target money laundering and terror financing in the continent.
In a statement released on Thursday, the group of policymakers shared that the proposed rules would cover “most of the crypto sector,’ forcing all crypto firms to conduct more stringent due diligence on their customers.
As per the provisional agreement, crypto firms would be obligated to apply due diligence when customers intend to process transactions worth at least €1,000 or approximately $1090. The EU policymakers’ statement asserts that the deal adds measures to mitigate risks in relation to transactions with self-hosted wallets.
While the European policymakers’ crypto deal awaits presentation to the European Parliament for approval, it stands to impact the industry significantly. The statement added that if approved, the Council and Parliament would need to formally adopt the texts before they are published in the EU’s Official Journal, marking their entry into force.
Vincent Van Peteghem, Belgian Minister of Finance, emphasized in Thursday’s statement that the provisional agreement aligns with the EU’s new Anti-Money Laundering (AML) system. He stated, “This will ensure that fraudsters, organized crime, and terrorists will have no space left for legitimizing their proceeds through the financial system.”
On The Flipside
- The EU finalized specific AML checks on crypto fund transfers in 2023.
- Coming into effect on 30 December 2024, MiCA will mark the first comprehensive crypto regulatory framework for the European Union.
Why This Matters
This proposal sets a precedent for the EU’s shift toward a stricter stance on crypto regulation. While the new proposal awaits a formal presentation and vote, if approved, it could significantly impact the crypto industry’s growth in the region.
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