EU Strikes Crypto AML Rule Deal Despite Fairness Concerns: What's at Stake?

In a significant move, the European Parliament and EU Council have tentatively agreed on new rules to combat money laundering in the crypto space. These regulations mandate identity checks by crypto companies for transactions exceeding 1,000 euros, forming part of a broader anti-money laundering regulation (AMLR) encompassing customer verification and additional safeguards.

Equal Treatment for Crypto and Banks Raises Concerns

The overarching objective is to establish parity in the treatment of crypto firms and traditional banks. However, apprehensions have surfaced within the crypto industry, expressing concerns that the new EU rules might impose more stringent requirements on crypto companies compared to their traditional banking counterparts.

Divergent Identity Check Requirements

One notable distinction is that crypto firms are mandated to conduct basic identity checks for all occasional transactions, presenting a contrast to the requirements imposed on banks. This variance in the application of rules has raised questions about the fairness of the regulatory framework.

Final Approval and Ongoing Technical Discussions

The AMLR, positioned as part of a broader initiative to curb illicit money flows, is yet to receive final approval. The regulatory package aims to establish uniformity in rules governing both the banking sector and crypto businesses. Technical discussions are currently underway, with the intention to present the finalized package for approval in April.

The European Union's provisional agreement on new anti-money laundering rules for crypto transactions above 1,000 euros is a significant development. While the goal is to ensure equal treatment for crypto firms and traditional banks, concerns have emerged regarding potential disparities in the application of these rules. The final approval and ongoing technical discussions will play a crucial role in determining the fairness and effectiveness of the regulatory framework in preventing illicit money flows.