European Union finds new way to combat money laundering

Mon 12 Jul 2021 ▪ 11h50 ▪ 3 min read — by Luc Jose Adjinacou

The European Union (EU) wants to create a new agency to crack down on regional money laundering. The institution is expected to first of all strengthen disclosure requirements related to transactions involving cryptocurrencies.

EU documents leak

The European Commission is reportedly proposing a special Anti-Money Laundering Authority (AMLA). It will be the “centrepiece” of an integrated supervisory system involving national authorities, says Reuters citing the allegedly leaked EU documents.

According to Reuters, the European lawmakers are drafting new requirements for virtual asset service providers (VASPs). Among them, an obligation to collect data related to the various parties participating in cryptocurrency transactions.

The reason the EU is now working on new laws to step up enforcement of anti-money laundering rules is that it has come under pressure after several countries began investigating Danske Bank with over 200 billion euros of suspicious transactions that passed through its tiny Estonian branch between 2007 and 2015.

The leaked documents indicate that money laundering is one of the major EU’s concerns. “Money laundering, terrorist financing and organised crime remain significant problems which should be addressed at Union level”, the documents say.

Investors “at the mercy of fraudsters”

The EU is not alone to combat money laundering practices in the world of crypto. Elizabeth Warren, American senator, has recently urged the Securities and Exchange Commission (SEC) to act and to crack down on the “highly opaque” crypto market.

“While demand for cryptocurrencies and the use of cryptocurrency exchanges have sky-rocketed, the lack of common-sense regulations has left ordinary investors at the mercy of manipulators and fraudsters”, said Elizabeth Warren.

“These regulatory gaps endanger consumers and investors and undermine the safety of our financial markets. The SEC must use its full authority to address these risks, and Congress must also step up to close these regulatory gaps”, she added.

The British Financial Conduct Authority (FCA) has taken action against the Binance crypto exchange in recent weeks, also trying to make the market less “opaque”.

Money laundering is becoming a thorny issue for the EU. The institution wants to tackle the problem at source by creating an authority to implement new regulations aiming at reducing the risk of money laundering involving cryptocurrencies.

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Luc Jose Adjinacou avatar
Luc Jose Adjinacou

Loin d’avoir refroidi mes ardeurs, un investissement infructueux en 2017 sur une cryptomonnaie n’a fait qu’accroitre mon enthousiasme. Je me suis dès lors résolu à étudier et comprendre la blockchain et ses nombreux usages et à relayer avec ma plume de l’information relative à cet écosystème.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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