EU Parliament to require crypto platforms to comply with AML rules

The European Parliament’s committees on Economic Affairs and the Internal Market have approved the bill’s text, extending AML requirements to DAO, NFT- and DeFi platforms in line with TradFi. The Block reports.

The provisions would apply to crypto firms where they are controlled directly or indirectly, including via smart contracts or governance protocols, by identifiable natural and legal persons.

The bill is expected to go to a plenary vote in the Parliament before proceeding to the next stage of trilogue negotiations among the European Parliament, the Council and the European Commission.

“Crypto platforms will be required to conduct due diligence on all customers and report suspicious transactions to authorities,” — said Green Party member Damien Carême.

It is envisaged that the procedure will apply to transactions above €1,000 ($1,080).

Enhanced measures are envisaged for correspondent relationships with CASP outside the EU and for payments using non-custodial wallets. The latter will be subject to the above threshold if the owner does not undergo identification and the transactions are for commercial purposes.

Engagement with unlicensed organisations may be banned.

The European Commission will assess within three years whether to adjust the rule on commercial payments to align it with regulatory acts, including the TC digital identity system and AMLA.

Anonymous crypto accounts would be banned. Private wallets and mixers could be accorded a similar status if the European Commission adopts such a measure.

“We are absolutely not obstructing crypto transactions. The ban is only relevant when identification is impossible,” — CoinDesk quotes Carême.

The deputy said he aimed to build a barrier against the transfer of ‘dirty money’ held by banks into other sectors.

In October 2022, EU Council members signed off on the MiCA draft regulation for regulating cryptocurrencies MiCA without further discussion. It includes rules that apply to issuers of unsecured crypto-assets, stablecoins, trading and custodial platforms.

In early 2023, the European Parliament moved the final vote on the document to April.

As noted, Binance CEO Changpeng Zhao described MiCA as ‘fantastic’, but ‘a little strict’ with regard to stablecoins.

Earlier, Circle predicted a rise in banks’ interest in cryptocurrencies after MiCA.