The rise of crypto comes with the unfortunate rise of dirty money. On July 7, the European Union released documents showing their plans to create an anti-money laundering agency and new rules for transferring assets to fight against the increasing issue of money laundering.
The pressure for Europe to take action against money laundering has grown exponentially following many bank scandals across the continent, the largest being the Danske Bank scandal where over 200 billion euros of suspicious transactions passed through a small Estonian branch of the Danish bank between 2007 and 2015.
The new agency, the Anti-Money Laundering Authority (AMLA), will be the main part of an updated regulator system. AMLA will make operational decisions on risky cross-border financial entities, as well as keep an eye on national regulators to prevent any terrorist or money laundering incidents.
Thus far, the 27 member states have been given the freedom to handle anti-money laundering regulations as they please. See by the Reuters news company, the European Commission makes a statement in the draft proposal on the new regulations being addressed centrally:
“Money laundering, terrorist financing, and organized crime remain significant problems which should be addressed at Union level… By directly supervising and taking decisions towards some of the riskiest cross-border financial sectors obliged entities, the Authority will contribute directly to preventing incidents of money laundering/terrorist financing in the Union.”
Currently being outside of the EU rules for financial services, the proposal will make crypto-asset providers collect and disclose data concerning the originators and beneficiaries of transfers in those crypto-assets to provide an extra level of security.
There is only one part of Europe that has its own money-laundering unit — Paris. The European Banking Authority (EBA), an EU regulator in Paris, felt that it was such a large problem that they could not wait for the EU to take action. The AMLA will be taking over the EBA’s unit in this area so that all states are under the same regulations.
For the agency to work at the highest level, all of the EU states will have to accept and enforce these anti-money laundering laws in unison.
The draft for the documents will be released on July 20, following its review by the European Commission. If member states agree, the AMLA will be running by 2026 at least.