The European Union’s proposed anti-money laundering regulation, which would impose stricter rules on cryptocurrency transactions, will not completely prevent their use for illicit purposes, according to the European Parliament’s lead negotiator on the legislation.
The new law, which is set to take effect in 2024, will require cryptocurrency service providers to register with national authorities and conduct customer due diligence, as well as report suspicious transactions to authorities. However, according to MEP Judith Sargentini, the regulation’s scope is limited and will not solve the problem of money laundering in its entirety.
Sargentini noted that the regulation only applies to service providers that exchange cryptocurrencies for fiat currency or vice versa, leaving out other forms of transactions such as peer-to-peer transfers. She also highlighted that the regulation only covers transactions above €10,000, while smaller transactions can also be used for money laundering.
While acknowledging the regulation’s limitations, Sargentini still believes that it will help to reduce the amount of illicit activities involving cryptocurrencies. She also stressed the importance of international cooperation in the fight against money laundering and called for a coordinated effort among EU member states.
The proposal for the regulation was first introduced in July 2016 as part of the EU’s Fourth Anti-Money Laundering Directive. Negotiations between the European Parliament, the European Council, and the European Commission were concluded in December 2020, and the regulation was adopted on April 20, 2021.
Overall, the EU’s new anti-money laundering regulation is a step in the right direction in addressing the issue of illicit cryptocurrency transactions. However, its limited scope means that additional measures may be necessary to fully tackle the problem. The EU and its member states must continue to work together to find effective solutions to combat money laundering.
In conclusion, the EU’s new anti-money laundering regulation will help to reduce the amount of illicit activities involving cryptocurrencies, but it will not completely prevent their use for nefarious purposes. As Judith Sargentini notes, the regulation’s scope is limited, and more needs to be done to fully tackle the issue of money laundering.