Altcoins

EU Adopted New Rules to Require Due Diligence for Crypto Firms

Reported by The Block, the European Parliament adopted new rules that would formally put in place due diligence requirements for crypto firms in a bid to combat money laundering.

The European Parliament voted on Wednesday to adopt a package of laws that would in part enhance “due diligence measures and checks on customers’ identity” including so-called crypto asset managers. They would also have to report suspicious activities to authorities.

The new law would affect crypto-asset service providers (CASPs), such as centralized crypto exchanges, as well as a slew of other institutions including gambling services, according to previous The Block reporting.

Circle’s EU Strategy and Policy Director Patrick Hansen, said the vote was expected, in a post on X.

“The package will now be formally adopted by the Council of the EU as well and enter into application 3 years later,” Hansen said.

Last month, Hansen debunked rumors that the new laws would ban anonymous crypto wallets and self-custodial payments. The new law would apply to CASPs already regulated under MiCA (Markets in Crypto-Assets Regulation), Hansen said. MiCA is a regulatory framework proposed by the European Union to govern digital assets and their markets that came into force in June 2023 and will be fully applicable at the end of the year.

“These CASPs will need to follow standard KYC/AML procedures like customer due diligence (CDD) etc,” Hansen said in a post. “This is nothing new, as all crypto exchanges & custodial wallet providers in the EU are already subject to these obligations under the current AMLD5.”

Overall, the final version is a “great outcome” for the crypto industry, Hansen said.

“Previous versions of the proposed AMLR proposed a way stricter approach that would have meant a KYC on the self-custody originator/beneficiary, but also thanks to industry efforts a risk-based approach with various options was finally agreed on,” Hansen said.

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