EU Provisional Agreement: Crypto Asset Service Providers Added to Obliged Entities List

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As per the provisional agreement struck between the European Union Council and Parliament, crypto asset service providers will be obliged to verify facts and information on users whose transactions exceed $1,090. According to the Belgian Finance Minister, the new requirements will “ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.”

New Measures Mitigate Risks Associated with Self-Hosted Wallets

According to a provisional agreement between the European Union (EU) Council and Parliament, crypto asset service providers (CASPs) will now feature in the list of obliged entities that are required to “conduct due diligence on their customers.” This means CASPs need to verify facts and information on users whose transactions exceed $1,090 or €1000.

In its Jan. 18 statement, the Council of the EU claimed that the due diligence, which also includes reporting suspicious activity, “adds measures to mitigate risks in relation to transactions with self-hosted wallets.” The statement also explains why the council and parliament agreed to add CASPs to a list which already includes banks, casinos, real estate agencies, and asset management services.

Commenting on the proposed changes to existing regulations, the Belgian Finance Minister Vincent Van Peteghem, said:

“This agreement is part and parcel of the EU’s new anti-money laundering system. It will improve the way national systems against money laundering and terrorist financing are organised and work together. This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.”

Under the provisional agreement, traders for items such as luxury cars, airplanes, yachts, and cultural goods also become obliged entities. In addition, professional football clubs also become obliged entities. However, according to the statement, EU members can still remove the football sector if they perceive it to be a low risk.

New Cash Payment Limit

Meanwhile, the statement also revealed that members will be required to impose a cash payment limit of nearly $11,000. By restricting the value of cash payments, the EU aims to “make it harder for criminals to launder dirty money.” The statement also revealed new cash payment thresholds for occasional crypto users.

“In addition, according to the provisional agreement, obliged entities will need to identify and verify the identity of a person who carries out an occasional transaction in cash between €3,000 and €10,000,” the Council of the EU said.

The council’s statement also outlined the responsibilities of member states’ respective financial intelligence units (FIU). It said each unit would be given “immediate and direct access to financial, administrative, and law enforcement information.” This information can include crypto transfers, national motor vehicles, and customs data.

Following the agreement between the Council and Parliament, the text of the provisional agreement is now set to be presented to member states’ representatives and the EU for approval.

What are your thoughts on the European Union’s latest anti-money laundering rules? Let us know what you think in the comments section below.