EU Approves New Agreement Against Money Laundering, Crypto Service Providers in Focus

The European Union has reached a provisional agreement that will give the bloc greater powers in the fight against money laundering and the financing of terrorism through high-value assets and cryptocurrencies, with a focus specifically on crypto.

Under the new agreement, all crypto service providers must now conduct due diligence on customers making transactions over one thousand euros to prevent fraudsters, organized crime, and terrorists from legitimizing their dirty money through financial loopholes.

– “I am very happy that we have successfully concluded this agreement as it will make the fight against money laundering truly European,” said co-rapporteur from the center-left, Socialist and Democratic Member of Parliament (S&D) Paul Tang, emphasizing that this is essential as oligarchs and criminals do not stop at national borders.”

The agreement follows legislation approved last year that governs crypto markets and is part of a broader effort to harmonize anti-money laundering rules in the EU to close legal loopholes that can be exploited for financing terrorism. Although EU laws against money laundering have been adequate in the past, they have been poorly enforced, partly because the rules lacked standardization.

The new rules still need to be formally approved by the European Parliament and member states before coming into effect, after which they will apply to all EU countries.

To ensure better enforcement this time, a new European body for combating money laundering and the financing of terrorism (AMLA) has also been established, which will have far-reaching powers to monitor and investigate transactions.

According to the new proposal, crypto service providers will act as ‘gatekeepers’ alongside banks, casinos, real estate agencies, and other financial asset management companies that have a ‘privileged position’ for detecting suspicious activities. Enhanced due diligence measures will also apply to transactions linked to high-risk countries, which will be listed on the EU’s risk list.

– “The law targets cash transactions and high-value assets such as cars, artworks, watches, boats, and aircraft,” the Union states, adding that these are the things ‘that oligarchs love the most.’

All cash transactions over 10 thousand euros will now need to be registered and can be investigated by the new EU body for combating money laundering. Football clubs have also been singled out as they are considered a high-risk sector following multiple allegations of money laundering.