EU seeks new anti-money laundering regulator and strict crypto reporting requirements

The European Union intends to set up a new notified body to combat money laundering at the regional level, the main objectives of which include increased reporting requirements for cryptocurrency transactions.

A July 8 report by Reuters, citing leaked EU documents, claims that the European Commission is proposing the creation of a new Anti-Money Laundering Agency (AMLA) to act as the “hub” of regulators, including national regulators .

The report also states that European lawmakers are drafting new requirements for Virtual Asset Service Providers (VASPs), which impose strict data collection standards for parties making money transfers. The data collected are also made available to the European regulatory authorities.

The report notes that the transfer of crypto assets is currently outside the scope of EU financial services rules and notes:

“The lack of such rules exposes holders of crypto assets to the risks of money laundering and terrorist financing, as illegal flows can be made through the transfer of funds. Crypto assets.”

The EU has come under pressure to strengthen anti-money laundering directives after several member states launched investigations into Denmark’s largest bank, Danske Bank, in which suspicious transactions valued at more than € 200 billion between 2007 and 2015 were conducted small branch in Estonia.

In the absence of a supranational regulator charged with controlling money laundering, the EU has historically relied on national regulators to enforce its policies.

“Money laundering, terrorist financing and organized crime remain serious problems that need to be addressed at Union level,” the document reads.

“By directly overseeing and making decisions about some of the riskiest companies with cross-border financial obligations, the Agency will contribute directly to the prevention of money laundering / terrorist financing in the Union.”

The SEC also called for tough crackdowns

Europe isn’t the only one cracking down on cryptocurrencies. The US Senator Elizabeth Warren called on the Securities and Exchange Commission to take action on “unclear and volatile” markets for digital assets on the same day.

Connected: From mining to software: China’s regulatory crackdown on cryptocurrencies continues

“While the demand for cryptocurrencies and the use of crypto exchanges has skyrocketed, the lack of normal regulation has left ordinary investors exposed to manipulation and scammers,” said Warren, adding:

“These regulatory loopholes put consumers and investors at risk and undermine the security of our financial markets. The SEC must use its discretion to address these risks, and Congress must fill those regulatory loopholes as well. “

The UK’s Financial Conduct Authority (FCA) has also taken action against the major crypto exchange Binance in recent weeks, which apparently prompted a wave of local banks to stop dealing with cryptocurrency exchanges.