Starting from now, the oversight of crypto-asset service providers (CASPs) falls under the jurisdiction of the government due to recently approved European Parliament regulations.
Starting on April 24, a new law was approved with the goal of enhancing the “background checks and consumer verification processes” for businesses within its reach, including CASPs (Consumer Reporting Agencies or Credit Service Providers).
Cryptocurrency exchanges, along with other impacted parties, must identify and notify the authorities of any questionable transactions. This rule is part of the comprehensive MiCA (Markets in Crypto-Assets) legislation.
Last year, the European Commission introduced MiCA (Markets in Crypto-Assets) regulation, which was approved in June 2023. This regulatory framework aims to safeguard investors and preserve financial stability within the European Union in relation to cryptocurrency assets.
An additional provision in the new law mandates the establishment of an organization named the Anti-Money Laundering and Countering Financing of Terrorism Authority (AMLA). Based in Frankfurt, Germany, this regulatory body will be responsible for enforcing the newly implemented rules.
At a recent event, EU strategy and policy head at Circle, Patrick Hansen, shed light on the issue by explaining that Compliance and Security Product Solutions (CASPSs) must follow the regulations of Know Your Customer (KYC) and Anti-Money Laundering (AML).
If CASPs comply with the stated regulations, residents in the country will have the opportunity to purchase goods and services using crypto platforms for transactions over €1000 ($1072). – Hansen’s statement can be paraphrased as follows.
Making this change could increase the usage of cryptocurrency for small transactions across the EU, bringing advantages to crypto payment providers such as Strike, who have recently broadened their offerings for European users.
The circle executive explained that this regulation was previously implemented through existing laws. As a result, all cryptocurrency wallet providers and exchanges functioning within the country must adhere to these regulations.
In earlier iterations of the proposed Anti-Money Laundering Regulation (AMLR), there was a suggestion for a more stringent method requiring Know Your Customer (KYC) verification for self-custody originators and beneficiaries. However, due to industry initiatives, a risk-based approach with multiple options was ultimately adopted instead.
Hansen pointed out that the EU Council would approve the law and its enforcement would begin three years afterwards. He considered this the “positive outcome” for the cryptocurrency industry, which primarily functions in legal ambiguity.
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2024-04-25 12:38