European Commission lawmakers have decided to bring the cryptocurrency market within the scope of the EU's anti-money laundering (AML) and terrorist financing legislation.
According to the Commission's decision, crypto exchanges and all companies providing digital currency services will be required to verify information about their clients. They will have to confirm this data and report any suspicious transactions and activities to regulators.
As part of the law's AML provisions, cryptocurrency companies will also be required to verify all transactions of €1,000 ($1,090) or more. The temporary law also includes measures to mitigate the risks associated with offline wallets. The law falls under an expanded list of organizations that now includes most of the crypto sector, Cointelegraph reported.
Belgian Finance Minister Vincent Van Petegem said, "The agreement is an integral part of the EU's new anti-money laundering framework. It will improve the organization and cooperation of national systems in the fight against money laundering and terrorist financing.
With such measures, the European Union is making a strong attempt to curb the illegal use of the financial system by fraudsters and terrorist organizations.
It is reported that cryptocurrency companies that provide services for transferring funds to different countries will be subject to special scrutiny. Lawmakers have developed standards for monitoring the transactions and business connections of famous people.
The Financial Intelligence Unit (FIU) has been given expanded powers to control the crypto industry. Special powers include the regulator's ability to collect data on financial and administrative activities more quickly and easily: tax information, cryptocurrency transactions, frozen assets, and financial penalties.
The changes to the interim anti-money laundering law will be made as part of a legislative package (MiCA). These rules will apply to all EU countries and will regulate the crypto industry. The AML law will strengthen EU measures to control the crypto sector and prevent money laundering and terrorist financing.
Crypto companies in the EU will now have to check whether they are involved in financial crimes. They will also have to screen their clients and their own products.
Next, the law is expected to be approved by the European Parliament and ratified by member states, after which the temporary law will come into effect.
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