The European Union is making it even more difficult for criminals to avoid the various anti-money laundering regulations using cryptocurrencies.
The European Council has adopted an update to the rules on information accompanying transfers of funds that extends the regulation’s scope of application to include crypto-asset transfers.
This ensures financial transparency of crypto-asset transfers and provides the Union with a robust framework that complies with the highest international standards on crypto-asset exchanges, so that crypto-assets are not used for criminal purposes.
Sweden’s Minister of Finance, Elisabeth Svantesson, considers the Council’s adoption of this regulation as an important step forwards in the fight against money laundering. This is bad news for those who misuse crypto-assets for their illegal activities, to avoid EU sanctions, or to finance terrorism or war.
With the adoption of these rules, crypto-asset service providers are required to collect certain information on the sender and beneficiary of asset transfers made through their services, regardless of the amount of the transaction, and to provide access to this information. This ensures the traceability of crypto-asset transfers, so they can be better detected and blocked in the case of possible suspicious transactions.
In parallel, the EU establishes a regulatory framework for crypto-assets, their issuers and their service providers. Accordingly, crypto-asset markets (MiCA) will, for the first time, have an EU-wide framework just for this sector.
The MiCA Regulation should protect investors by improving transparency and establishing a comprehensive framework for issuers and service providers, and will also ensure compliance with anti-money laundering regulations. The new regulations include issuers of consumer tokens, asset referenced tokens and the so-called stable cryptocurrencies, as well as service providers, such as trading venues and wallets where crypto-assets are stored. This regulatory framework aims to protect investors and ensure financial stability, while facilitating innovation and fostering the attractiveness of the crypto-asset sector.
Furthermore, in view of the global nature of crypto-asset markets, the regulatory framework introduces a harmonised regulatory framework in the European Union, which is an improvement over the current situation, where national legislation exists only in some member states.
The European Council adopted its negotiating mandate on the Regulation on crypto-asset markets on 24 November 2021, while the proposals on strengthening anti-money laundering and terrorist financing rules were adopted on 20 July 2021. The latter also includes the proposed creation of a new EU authority to combat money laundering.