The EU Council and Parliament have reached a temporary agreement on parts of an anti-money laundering (AML) package that requires cryptocurrency companies to follow stricter due diligence requirements.
In a statement, the European Council said the new rules would cover “most of the cryptocurrency sector,” requiring crypto asset service providers (CASPs) to conduct due diligence on customers making transactions worth €1,000 or more. The rules also include measures to “mitigate risks related to transactions with self-hosted wallets,” the announcement said.
CASPs will also be required to conduct enhanced due diligence on cross-border correspondent relationships as part of the rules.
Another clause sets an EU-wide cap of 10,000 euros on cash payments, which the council claims will “make it more difficult for criminals to launder dirty money.” Businesses will also be required to identify and verify the identity of individuals who make occasional cash transactions between €3,000 and €10,000.
The deal will now be finalized and submitted to the European Parliament for approval. “If approved, the Council and Parliament will have to formally adopt the texts before they are published in the Official Journal of the European Union and come into force,” the statement read.
The temporary agreement comes as part of the European Union’s Sixth Anti-Money Laundering Directive and the European Union’s Common Rules Regulation. “We will close a large number of existing loopholes that make life very easy for money launderers,” Ludek Niedermayer, President of the European Parliament on behalf of the Economic Committee, said in a statement. “In the digital age we must also ensure that data is available quickly and can be processed effectively,” he added.
Last year, the European Union passed the Markets in Cryptoassets (MiCA) legislation, a wide-ranging legal framework that imposes a uniform approach to regulating cryptoassets across all 27 member states. Among its provisions, MiCA sets clear rules for CASPs, requiring them to adhere to common standards regarding security and anti-money laundering protection.