EU Members Want to Task New AML Watchdog With Crypto Oversight

EU Members Want to Task New AML Watchdog With Crypto Oversight – A group of EU nations is apparently advocating for the crypto area to be overseen by a new anti-money laundering (AML) body. Concerns that organizations working with digital assets may be involved in the processing of illicit payments are behind the move.

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Several EU member states, led by Germany, have lobbied the European Union to give a planned anti-money laundering (AML) watchdog authority over the crypto sector. Bloomberg said that several countries are concerned that cryptocurrency companies will be used to process illegally obtained assets, citing reliable sources.

Authorities in the EU, including the European Commission (EC), are currently negotiating the design of the regulatory agency, which is set to begin in 2024 and expand its operations over the next two years.

Also Read: Streaming Service Sling TV Adds Crypto Payment Support for Monthly Subscriptions

According to an EU official who, like the other sources for the report, wanted to remain anonymous, “the group is attempting to obtain a more explicit inclusion of crypto businesses in the watchdog’s tasks”.

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After a succession of scandals in recent years that revealed weaknesses in the EU’s regulatory structure that allowed filthy money to flow freely, the bloc is ready to establish the new body. Meanwhile, the expanding crypto industry has opened a new front for law enforcement, with the anonymity of digital assets purportedly enticing criminals and rogue regimes.

Austria, Spain, Luxembourg, Italy, and the Netherlands are among the countries that have pledged their support to Germany’s effort. They want the new European watchdog’s mandate to include the most risky cross-border firms, such as banks, other financial institutions, and crypto service providers, according to the diplomat. The European Commission’s proposal from July 2021 only makes a passing reference to “virtual assets.”

The executive body has declined to comment, and the notion has yet to be discussed by member states. According to the officials interviewed, it is yet uncertain if the adjustments will be well-received. Furthermore, the legal texts will be decided by the European Parliament.

Luis Garicano, a key EU legislator who supports the initiative, stated:

“Given that crypto assets are one of the more susceptible to money laundering operations, it is critical that the new EU authority’s scope specifically encompasses them.”

Also Read: US Lawmaker Introduces Bill to Protect Privacy in Cryptocurrency Transactions

EU Members Want to Task New AML Watchdog With Crypto Oversight – National authorities are currently in charge of countering money laundering in the EU, which limits their efficacy and calls into question their independence. Several big scandals have rocked Europe’s financial sector in the last decade, notably the laundering of Russian funds through Danske Bank’s Baltic operations and Latvia’s ABLV Bank.

Illicit transactions increased by 80% to an all-time high of $14 billion last year, according to Chainalysis, a blockchain forensics business. Despite this, crime-related flows account for a minor portion of total crypto transaction volume, which has also witnessed a significant growth in 2021.

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