Breaking: EU's new AML Guidelines set to ban anonymous crypto wallets
EU’s Anti-Money Laundering (AML) proposal has incorporated a cryptocurrency clause under its third regulation. The Commission’s legislative proposal for crypto is responsible for regulating crypto-assets service providers. This clause also extends to transfers in crypto assets, for instance on Bitcoin (BTC) transfers there shall be a mandatory requirement to provide information on the originator and the beneficiary that are already commonplace for bank transfers.
The EU in its report said,
Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” the Commission said in a statement
Anonymous Crypto Wallets in Trouble
With the Institutional adoption of cryptocurrencies, there has also been a rise in crypto exchanges becoming the war zone for cyber-crimes globally. The decentralized system of money is anonymous and harder to trace, therefore it can be easily utilized in money laundering. To prevent the same, Anti-Money Laundering guidelines have been developed worldwide. However, AML guidelines have been known for being rigid and strict.
These regulations demand special reporting from exchanges that interfere with the daily functioning of trade and exchange on their blockchains.
*EU AIMS TO BAN ANONYMOUS CRYPTO-ASSET WALLETS
— *Walter Bloomberg (@DeItaone) July 20, 2021
The anonymous crypto wallets could be the first target under the newly proposed AML guidelines.
European Exchanges Face Tough Regulatory Challenge
The European Commission will be releasing its long due Anti-Money Laundering (AML) proposal. EU’s guidelines are often used as a template by other Nations. The US recently proposed similar AML guidelines with exchanges needing to report every transaction over $10K.
With the implementation of the upcoming EU’s AML proposal and the Crypto clause, there lies a threat for European crypto exchanges that may be subjected to unrealistic and strict regulations to operate in the region.
Korean AML guidelines
In the Korean region, exchanges are now facing closure because of the strict AML guidelines that have been implemented by the Korean government.
Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC) announced that any crypto exchange that operates in the Korean region, will be mandated by FSC’s AML regulations. Foreign crypto exchanges will be required to get authorization from the FSC’s AML watchdog, i.e., the Korea Financial Intelligence Unit.
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