Crypto Customers Targeted by EU New Provisional Legislation

Lyubov Pronina
·2 min read

(Bloomberg) -- The European Union is a step closer to making crypto companies conduct due diligence on their customers, part of a wider push to combat money laundering.

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EU member states, lawmakers and the European Commission reached a provisional agreement early Wednesday under which cryptoasset service providers will have to run checks when carrying out transactions of €1,000 ($1,090) or more. It also adds measures to mitigate risks in relation to transactions with self-hosted wallets.

“This will ensure that fraudsters, organized crime and terrorists will have no space left for legitimizing their proceeds through the financial system,” Belgian Finance Minister Vincent Van Peteghem said in a statement. Belgium holds the EU’s six-month rotating presidency.

The deal is part of a bigger package that aims to protect the EU’s financial system against money laundering and terrorist financing. It follows the approval of wide-ranging legislation governing digital finance known as Markets in Crypto Assets, or MiCA. The co-legislators also introduced enhanced due diligence measures for cross-border correspondent relationships for cryptoasset service providers.

The new rules still need to be formally approved by the European Parliament and member states before coming into force.

The provisional agreement on an anti-money laundering regulation aims to harmonize rules throughout the EU, closing possible loopholes used to launder illicit proceeds or finance terrorist activities through the financial system.

Cryptoasset service providers, along with financial institutions, banks, real estate agencies, asset management services, casinos, and merchants will be nominated as “obliged entities” to act as gatekeepers.

The regulation will also include the luxury goods industry. Traders of precious metals and stones, jewelry, luxury vehicles and artworks will have to run checks on customers and report suspicious transactions. Professional football clubs and agents however may be removed from the list by member states if they represent low risk.

Additionally, a maximum limit of €10,000 for cash payments will be enforced throughout the EU.

(Updates with more details from sixth paragraph.)

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