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In a move aimed at fortifying its Anti-Money Laundering (AML) and counter-terrorism financing framework, the European Parliament has recently approved a comprehensive set of regulations with significant implications for the cryptocurrency sector.
The newly adopted regulations entail bolstered due diligence protocols and heightened scrutiny of customer identities. Entities falling under regulatory obligations, including banks and cryptocurrency asset managers, are now mandated to promptly report any suspicious activities to Financial Intelligence Units (FIUs) or relevant competent authorities. This marks a notable escalation in vigilance within the cryptocurrency sphere.
Under the ambit of the legislation, FIUs have been endowed with expanded authority to scrutinize and uncover instances of money laundering and terrorist financing, coupled with the ability to suspend transactions deemed suspicious.
To oversee the implementation of these stringent measures, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will be established in Frankfurt. AMLA’s mandate encompasses the supervision of high-risk financial entities, intervention in cases of supervisory lapses, facilitation of coordination among supervisory bodies, and resolution of disputes between them. Additionally, AMLA will monitor the enforcement of targeted financial sanctions.
Comprising the sixth AML directive, the EU “single rulebook” regulation, and AMLA regulation, this legislative package is poised to usher in a paradigm shift in AML compliance across the EU.
Noteworthy provisions of the regulations include granting access to beneficial ownership information to stakeholders with a “legitimate interest,” such as journalists, civil organizations, and competent authorities. This access extends to data spanning at least five years and interconnected at the EU level through national registries.
Furthermore, the regulations introduce heightened vigilance requirements for high-net-worth individuals (with a total wealth exceeding €50,000,000), impose an EU-wide cap of €10,000 on cash transactions (with exceptions for non-professional transactions between private individuals), and institute measures to forestall the circumvention of targeted financial sanctions.
In a move indicative of the regulations’ wide-reaching impact, top-tier football clubs will be obligated to verify customer identities, monitor transactions, and promptly report any suspicious activities to FIUs for high-value transactions starting from 2029.
Commenting on the regulatory developments, Ilya Brovin, Chief Growth Officer at Sumsub, lauded the EU’s proactive stance, emphasizing that the latest AML regulations represent a crucial step towards fostering a secure and transparent cryptocurrency industry, a milestone deserving of commendation.
By ushering in these comprehensive regulations, the EU aims to shore up its defenses against financial crimes while fostering integrity and transparency within the cryptocurrency landscape, a pivotal endeavor in an era marked by technological advancements and evolving financial landscapes.
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