BREAKING: EU to scrutinize Bitcoin and crypto payments over €1,000 – Is it to save the citizen?

  • E.U. Council set to issue a new directive requiring crypto firms to report transactions worth over €1000. 
  • The rule is intended to limit AML/CFT risks but could slow down crypto adoption in the bloc. 

The Council of the European Union — an essential EU decision-maker — has agreed on new and stricter anti-money laundering and countering the financing of terrorism (AML/CFT) guidelines for cryptocurrency transactions.

The EU body said in a statement that the new AML directive, dubbed AMLD6, will among other things recast the EU transfer of funds regulation including in the entire crypto sector.

Under the new rules that are just awaiting adoption after being endorsed by the European Parliament, all crypto-asset service providers (CASPs) will be obliged to conduct due diligence on their customers when carrying out transactions amounting to €1000.

In essence, CASPs will have to verify facts and information about their customers in such situations. It further noted that the new regulations will introduce specific “enhanced due diligence measures for cross-border correspondent relationships” for CASPs.

Meanwhile, the new regulation will also outlaw large cash payments beyond €10,000 ($10,557) in all countries that are part of the bloc. Zbyněk Stanjura, Minister for Finance of the Czech Republic, notes that the move is aimed at filling loopholes exploited by criminal individuals and organizations by making it impossible to be anonymous when buying or selling large amounts of crypto assets.

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Trying to stay anonymous when buying or selling crypto-assets will become much more difficult. Hiding behind multiple layers of ownership of companies won’t work any more. It will even become difficult to launder dirty money via jewelers or goldsmiths, he said.

Additionally, the strengthened rulebook will see the EU use the country classification system of the Financial Action Task Force (FATF) to determine non-EU countries to scrutinize for risk of money laundering. It says this will build more synergy between the EU and the FATF and prevent the waste of resources through double assessment.

New rules could stifle crypto adoption in the E.U.

The regulation is similar to Anti-fraud laws that have been in operation in Spain, an EU member country. The law approved by the Spanish Parliament last year sets a €1000 maximum limit for cash payments, as well as requires all Spanish citizens to declare all crypto assets they hold in or outside the country as reported by local news outlet El Economista at the time.

The Spanish legislation was met with some pushback from crypto market participants who feared that it could stifle crypto adoption. Similarly, the European Central Bank (ECB) had also previously noted that the cash restriction could undermine the legal tender status of cash.

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