by Rhoda Wilson, Expose News:
Last Monday, the Council of the European Union announced that the Council and the Parliament had struck a deal, a provisional agreement, on stricter anti-money laundering rules. The reason for the new regulations, so they claim, is to combat “terrorist financing,” a goal which has been fast-tracked since the 7 October Hamas terrorist attack on Israel.
As well as “enhanced due diligence” for crypto-asset service providers, the new rules set an EU-wide maximum limit of €10,000 for cash payments. In addition, according to the provisional agreement, obliged entities will need to identify and verify the identity of a person who carries out an occasional transaction in cash between €3,000 and €10,000.
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As very few persons are terrorists – who are, in any case, individually monitored by other means – the reality is the EU is not countering terrorism; they are targeting anonymous methods of payment so they can track all citizens’ financial transactions. It would seem the EU’s new anti-money laundering regulation is part of the preparation for the implementation of central bank digital currencies (“CBDC”).
Further reading: CBDCs are steeped in human rights abuses and are a new way to track citizens
EU Anti-Money Laundering Regulation
Following Hamas’ attack on Israel on 7 October 2023, lawmakers rushed to stop terrorist organisations from using crypto to finance their operations, especially in light of reports that the Palestinian group was using digital assets to help fund its militants.
In November 2023, the European Parliament proposed adding extra due diligence measures for firms handling crypto transactions under €1,000. Other forms of payments wouldn’t need those extra measures.
The reasoning was that terror groups often use low-value transactions to conceal their funding practices.
On Monday 18 January 2024, policymakers in the European Union (“EU”) reached a provisional deal on parts of a comprehensive regulatory package to combat money laundering that will force all crypto firms to run due diligence on their customers.
Another late night, another deal! @Europarl_EN and @EUCouncil have agreed the new Anti-Money Laundering Regulation.
This means strong, consistent rules across the EU in the fight against dirty money: a game changer.
Congratulations @EU2024BE @DamienCAREME @EeroHeinaluoma pic.twitter.com/xnFL9znOcP
— Mairead McGuinness (@McGuinnessEU) January 18, 2024
The European Parliament and European Council, which gathers finance ministers from the bloc’s 27 member states, agreed to measures, including for crypto companies to apply “customer due diligence measures when carrying out transactions amounting to €1,000 or more.”
“This agreement is part and parcel of the EU’s new anti-money laundering system. It will improve the way national systems against money laundering and terrorist financing are organized and work together. This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system,” Belgian Minister of Finance, Vincent Van Peteghem, said in a press statement.
Crypto firms in Europe have to comply with the EU’s previous laws for anti-money laundering. To register with the national authorities, crypto service providers need to meet Anti-Money Laundering (“AML”) standards. But the previous rulebook, AMLD5, is a directive and not a regulation. A directive means that each member state can interpret and apply the rules in its own way. A regulation is a lot stricter than a directive, and the laws will be implemented more evenly across the 27-nation EU bloc. On top of that, the EU’s package on anti-money laundering establishes a new authority which will oversee the rules once they become law.
Further reading: EU’s Anti-Money Laundering Directive 5 (AMLD5), Coin Telegraph
Since the AML Regulation (“AMLR”) was proposed in 2021, crypto lobbyists have fought hard to make sure lawmakers don’t scrutinise the industry more than the other finance sectors.
The package may have got tougher as it went through the EU’s complex legislative process in light of US sanctions against crypto anonymising tool Tornado Cash, as well as fears that crypto was being used to evade sanctions by Russia and even Hamas, CoinDesk wrote.
DL News described the new measures for crypto companies as an attempt to outlaw and restrict some of the most prized features in crypto. “The EU is taking aim at privacy coins and self-custody wallets under new anti-money laundering regime,” the outlet wrote. “The Council of the EU is looking to place a ban on coins which enhance anonymity … [and] prohibit companies from offering anonymous accounts.”
