EU Tightens Grip: Stricter Regulatory Framework for Crypto Firms

• Stricter Cryptocurrency Regulations in the European Union
• Enhancing Anti-Money Laundering Measures
• New Requirements for Crypto Asset Service Providers
• Regulations Impacting High-Value Goods Sellers
• Limiting Use of Hard Currency for Illicit Transactions
• Preliminary Backing and Future Approval

Stricter Cryptocurrency Regulations in the European Union

The European Union (EU) has provisionally agreed to enforce stricter regulations on cryptocurrency companies. This initiative is part of a larger effort aimed at bolstering coordination among national authorities to effectively tackle money laundering. The agreement comes in the wake of extensive discussions involving representatives from EU member states and the European Parliament.

Enhancing Anti-Money Laundering Measures

This move is part of a set of anti-money laundering strategies established to rectify inconsistencies in the ways different countries currently tackle fraud and financial crimes. The EU is also looking to expand existing cryptocurrency rules. With this agreement, the EU's existing anti-money laundering rules will be broadened to encapsulate a larger segment of the cryptocurrency ecosystem.

New Requirements for Crypto Asset Service Providers

Crypto asset service providers will now be mandated to conduct due diligence checks on customers carrying out transactions of €1,000 ($1,090) or above and report any suspicious financial activity. Added verification stipulations will be applicable to cross-border crypto companies. The regulations are also designed to limit the use of self-hosted digital wallets, which enable users to directly maintain their private keys. Such wallets have earned a reputation for facilitating criminals in concealing funds more conveniently.

Regulations Impacting High-Value Goods Sellers

Besides cryptocurrency traders, the regulations will also apply to sellers of luxury and high-value goods such as precious metals, jewelry, luxury vehicles, and aircraft. These requirements are intended to make it harder for illegal earnings to be funneled into assets that hold value and are easy to transport or hide.

Limiting Use of Hard Currency for Illicit Transactions

In line with the broader aim to restrict the use of hard currency for illegal transactions, the agreement introduces a €10,000 limit on cash payments across the EU. Moreover, any entity receiving a cash payment between €3,000 and €10,000 will need to identify and verify the source, a move aimed at curbing money laundering.

Preliminary Backing and Future Approval

While the rules have received preliminary backing, they still require formal approval from EU states and the European Parliament to become official laws.

Edited by Jonathan Stoker