KEY FACT: The European Union has formally passed a new anti-money laundering regulation, applicable to all crypto-asset service providers. The new legislation could impact centralized crypto exchanges under MiCA and pave way for more adoption of decentralized exchanges.
Edited on Corel Paint
The European Parliament has approved a new anti-money laundering regulation (AMLR), applicable to all crypto-asset service providers (CASPs). The regulation is aimed at establishing formal due diligence obligations for cryptocurrency companies and improving identity checks for customers to combat money laundering. The CASPs are required to report any suspicious activities to authorities. The laws would provide more powers to Financial Intelligence Units (FIUs) to detect and combat money laundering and terrorist financing.
This new legislation approved and announced on April 24, will likely impact crypto-asset service providers such as centralized crypto exchanges (CEXes) under the Markets in Crypto-Assets (MiCA) regulation and various other entities, including brokers and gambling services.
The legislation further spells that people in with legitimate interests, including journalists, media professionals, civil society organizations, competent authorities, and supervisory bodies, will have immediate, unfiltered, direct, and free access to beneficial ownership information held in national registries and interconnected at EU level.
According to a tweet by Circle’s EU Strategy and Policy Director, Patrick Hansen, the regulation empowers CASPs to verify the identity of customers who decide to buy goods and services with crypto.
“If you want to use a CASP though for buying goods & services with crypto, even outside of a regular business relationship, this CASP will need to perform customer due diligence on you – meaning verify your identity + potential additional KYC/AML measures if the transaction is above €1K,” - Source
EU's request for standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures such as customer due diligence could likely scare some users from the use of CEXes. Could this be an opening for the adoption of more DEXes?
The announcement also intends to include football professionals, high-value investors, and sponsors in the watchlist starting from 2029.
From 2029, top-tier professional football clubs involved in high-value financial transactions with investors or sponsors, including advertisers and the transfer of players will also have to verify their customers’ identities, monitor transactions, and report any suspicious transaction to FIUs - source
Governments are not relenting in their push to control money even in the crypto sphere, is this possible? Many sectors are beginning to embrace blockchain infrastructures with true decentralisation which also comes with transparency. Hive is one of such platform that could be all-sought-for as it embodies social fronts, decentralized exchanges, and more crypto use cases.
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