EU Reinforces AML Protocols by Banning Unidentified Crypto Transactions

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March 30th, 2024
Back EU Reinforces AML Protocols by Banning Unidentified Crypto Transactions

Continuing to strengthen its Anti-Money Laundering (AML) measures, the European Union went live with a new set of measures that encompass both cash and crypto transactions. As per the newly presented regulations, anonymous transactions of any sort will no longer be permitted, whereas cash payments over EUR 10,000 will be forbidden as well.

This decision will undoubtedly have a huge impact on multiple sectors, including the online casino industry. Although Bitcoin and crypto casinos used to be predominantly anonymous, in recent months such practice has changed, resulting in mandatory ID verification.

The freshest set of measures referring to AML protocols does seem too rigorous at first sight, but the regulators made sure to tailor them to be as fair and considerate as possible, taking various circumstances into account.

Bidding Farewell to Anonymous Transactions

The newest set of laws aims to address the loopholes that have been exploited for quite some time, making room for illegal financial activities. One of the measures set out by the European Union is to put a stop to anonymous cash and cryptocurrency transactions (those made via Bitcoin, Dogecoin, Ethereum, Tether, Litecoin, etc).

According to the new regulations, the use of crypto wallets that cannot be identified, as well as digital wallets that are not operated by licensed providers will be prohibited. This includes mobile, desktop, and browser-based providers.

In addition to these, certain limitations will be imposed on cash payments. Aside from prohibiting transactions over EUR 10,000, the EU will also classify anonymous cash transactions of EUR 3,000 as illegal.

Although the measures are expected to become effective three years after the official introduction, specialists from a law firm in Dublin have a different opinion. They predict that new regulations will be implemented even earlier than the predetermined deadline.

Until the new measures are officially put into law, players still have lots of options to choose from. Anonymous online casinos give them a chance to remain anonymous while gambling while no KYC casinos eliminate the need for ID verification.

Both types are usually crypto-friendly casinos, but casinos that don’t require KYC to be completed can be those belonging to Pay N Play as well.

How Effective Are the Measures?

The new AML laws will most likely have a positive impact in diminishing money laundering practices, however, its full effectiveness is yet to be evaluated.

While the reactions are prevailingly positive, certain individuals claim that they can harm individual financial freedom.

As Patrick Breyer, a member of the European Parliament representing the German Pirate Party pointed out, anonymous transactions represent one of the fundamental human rights needed for establishing financial independence.

Although regulations will make a notable impact on future developments in multiple sectors, namely finance, and technology, certain fields will be unaffected. For example, no limits will be set for cash payments between individuals, and small-scale financial activities.

Do New Laws Affect the Regulation of Crypto?

With new and more rigorous AML measures in place, the future of crypto assets remains uncertain. Prohibition on anonymous transactions will bring up privacy issues, which will result in additional delays in the already slow acceptance of digital currencies such as Bitcoin, Litecoin, Tether, Dogecoin, and others Europe-wide.

Speaking of progress with regulation of crypto, the ground-breaking moment happened in 2023, when Markets in Crypto Assets Regulation, or MiCA, for short, was unveiled. Crafted with the purpose of “putting an end to the crypto Wild West”, this regulation aims to establish clear rules for crypto exchanges.

Legal certainty, crypto-friendly rules, and a single license for the entire bloc are some of its most prominent advantages, while disadvantages include tough rules to be met, caps on USD stablecoins, and the fact that NFTs remain a gray area.

Source:

“New EU legislation prohibits unidentified cryptocurrency transactions”, sigma.world, March 26, 2024.

“anonymous transactions of any sort will no longer be permitted”

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