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NFT Platforms Should Be Caught by EU Money-Laundering Overhaul, Lawmakers Say


www.coindesk.com 04 July 2022 19:55, UTC
Reading time: ~2 m

NFT trading platforms should be made subject to European Union anti-money laundering (AML) laws, members of the European Parliament have said in proposed amendments to the legislation published Monday.

Lawmakers from the Green Party and socialist representatives also appear to favor including self-managed crypto wallets and decentralized finance under a proposed regulation on money laundering.

Just last week, the bloc provisionally agreed on new laws designed to license crypto companies, known as the Markets in Crypto Assets Regulation (MiCA), and impose identity checks on transactions. But the European Commission was keen to leave detailed money-laundering procedures for a wider overhaul that also covers sectors such as banking.

Read more: EU Agrees on Landmark Crypto Authorization Law, MiCA

An amendment to those laundering laws proposed by the Green Party’s Ernest Urtasun and Kira Marie Peter-Hansen, alongside socialists Aurore Lalucq and Csaba Molnár, seeks to make NFT platforms – anyone who acts as an intermediary for importing, minting or trading the assets that represent proof of ownership of artworks or collectibles – “obliged entities” under EU money laundering law, according to the document dated June 22.

That would mean that the likes of OpenSea might have to assess the risk of illicit finance flowing through their systems and carry out identity checks on new customers and suspicious transactions, on par with what other entities like banks, real estate agents, art traders and other crypto providers do.

Read more: No AML Checks for Most Transfers to Unhosted Crypto Wallets, EU Policymakers Decide

Further amendments by Urtasun, Peter-Hansen, Lalucq and Dutch lawmaker Paul Tang are also seeking to use the law to impose laundering checks on decentralized autonomous organizations (DAOs) and “unhosted wallets” that aren’t managed by any regulated crypto provider. An attempt to do so via MiCA and a parallel set of rules known as the Transfer of Funds regulation was largely abandoned following opposition from EU member governments.

Another change proposed by by Gunnar Beck of the right-wing Alternative for Germany party, seeks to protect cryptocurrencies from the effects of the law, saying they “make it possible for people to diversify their portfolio and protect themselves from risks of [European Central Bank]-induced euro inflation."

The EU is looking to overhaul its money-laundering framework, including via setting up a new agency to control lenders, after a string of scandals in the conventional financial sector which involved the likes of Denmark’s Danske Bank and Malta’s Pilatus Bank.


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