In an audacious move aimed at curtailing clandestine money laundering activities, the European Union has implemented a groundbreaking directive prohibiting all commerce utilizing unidentified, privately-run crypto wallets, irrespective of transaction values. This news was unveiled by a representative from the European Parliament, who also confirmed that the far-reaching directive had won considerable endorsement from the Sovereign EU Parliament’s leadership committee during their session last Thursday.
Designed to tighten the grip on money laundering, this pioneering regulation establishes restrictions on cash transactions and forbids all anonymous cryptocurrency transactions. More specifically, it criminalizes any cash transaction exceeding €10,000 and any untraceable cash transaction over €3,000.
The legislation zeroes in on transactions originating from covert, unregistered crypto wallets and those destined for monitored service providers. Given the intrinsically unmarked and unrestricted characteristics of cryptocurrency networks, the directive effectively curtails their usage.
Raising the bar, the new regulation necessitates more thorough monitoring of digital asset transfers and mandates crypto enterprises to implement stringent due diligence measures as an obstacle to potential money laundering. The purview of these regulations now covers the majority of the cryptocurrency sector, driving a crucial need for exhaustive customer background investigations.
There’s a pronounced emphasis within the legislation’s framework on maintaining meticulous records related to actual end-users. The goal of such attention to detail is the exposure of real owners or regulators of legal entities. Such a change will oblige a variety of institutions ranging from banks and real estate firms to cryptocurrency enterprises to redouble their customer verification efforts.
These emerging EU regulations are significantly reshaping the manner in which cryptocurrency is offered, managed, and traded throughout the region. Demonstrating the impact of these sweeping changes, premier exchange OKX announced the suspension of USDT trading pairs across the region last week, complying with the rules levied on stablecoins by the impending MiCA regulations. The reverberations of these changes are starting to echo throughout the world of fin-tech, signaling a new era in financial regulation.
