The European Parliament made significant modifications by passing new laws that require crypto-asset service providers (CASPs) to do a lot of research on the people who buy their services. This move, which was made official on April 24, is part of a larger effort by the government to protect consumers in the growing cryptocurrency market.
The law, which is part of the larger Markets in Crypto-Assets (MiCA) regulation, requires all businesses working in the EU to be more careful with identity checks and other due diligence procedures. It focuses on CASPs in particular. These include markets for cryptocurrencies and other similar sites.
EU Crypto Due Diligence
Under the new rule, groups that are affected must keep an eye on things and quickly tell the right people about any activities that seem fishy. The goal of this regulatory system is to protect investors better and keep the European Union’s finances stable.
The law sets up a new governing body called the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), which is an important part of it. With its main office in Frankfurt, Germany, this organization will be in charge of putting the new rules into action and making sure they are followed.
Patrick Hansen, who is in charge of EU planning and policy at Circle, a major cryptocurrency company, explained what the law means. He made it clear that CASPs will have to follow Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. This will make crypto transfers safer for users.
Hansen also made it clear that the new rules will not change the way crypto-powered small transactions are done. They will only apply to transfers over EUR 1000 (about $1072), which is the same as the rules that already apply to wallet providers and cryptocurrency exchanges.
Hansen also talked about how industry leaders and lawmakers worked together to make the regulatory approach more fair and practical, instead of the overly strict ones that were first suggested.
When the law is actually passed by the Council of the EU, it will go into effect three years after that. Hansen said that the final form of the law was good for the cryptocurrency industry, which has often been in a regulatory gray area.
The EU’s crypto environment should become stronger and more open as a result of this move. This could be good for companies like Strike, which recently expanded their services to serve customers in Europe.
