The European Parliament (EP) has introduced several new measures to reduce the risks in the cryptocurrency industry.
The new rules are the fifth update to the EU’s Anti-money laundering Directive and have been launched in response to the 2015 and 2016 terrorist attacks in Paris and Brussels, and the Panama Papers leaks.
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The new rules mandate virtual currency exchange platforms and custodian wallet providers to apply customer due diligence controls, such as customer verification requirements.
Under the rules, cryptocurrency platforms and providers will also have to be registered.
Co-rapporteur Judith Sargentini said: “Annually, we lose billions of euros to money laundering, terrorism financing, tax evasion and avoidance — money that should go to fund our hospitals, schools and infrastructure.
“With this new legislation, we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence. This will shine a light on those who hide behind companies and trusts and keep our financial systems clean. These rules will also be of enormous benefit to developing countries and their fight against illicit outflows of money which is desperately needed for investment in their own societies.”
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By GlobalData
