The European Parliament has introduced new Anti-Money Laundering (AML) regulations impacting cryptocurrency-related sectors, including online casinos. The new laws are part of the Markets in Crypto-Assets (MiCA) framework.
They impose stringent requirements on crypto-asset service providers (CASPs) across the European Union. This step is seen as crucial for promoting transparency and mitigating financial crime risks.
Tougher AML Regulations for Crypto Exchanges and Casinos
The newly endorsed AML package affects all entities dealing with cryptocurrencies, including 10 pound deposit casino that cater to UK players not on GamStop. These casinos, often favoured for their flexibility and crypto payment options, now face stricter due diligence standards.
Under the new framework, crypto exchanges in the EU must comply with enhanced regulations, especially those providing services like custody wallets or exchanging crypto for fiat currencies. The move seeks to align these platforms with the latest Financial Action Task Force (FATF) standards.
The Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) has been established in Frankfurt to oversee these rules. Though the final adoption of the law is pending, AMLA will play a central role in monitoring compliance.
Crypto Casinos and Customer Verification Requirements
The latest rules introduce several measures affecting how crypto-asset service providers operate. The most notable changes include:
- Prohibition on Anonymous Accounts: Crypto service providers are barred from offering services to anonymous accounts. All customer transactions above £1,000 will require rigorous checks, similar to those used by banks.
- Exclusion of Self-Hosted Wallets: Providers of self-hosted wallets are not required to comply with AML measures if they do not control user assets. However, crypto-asset service providers must verify self-hosted wallet owners and gather additional transaction data when handling such accounts.
- Stricter Rules for Anonymous Coins: The use of anonymous cryptocurrencies is restricted under MiCA regulations.
Obliged Entities Under the AML Framework
The AML regulations classify a wide range of entities as “obliged entities.” These entities are required to apply customer due diligence measures to ensure compliance. The new rules extend beyond financial institutions to include various sectors, such as:
- Crypto-asset service providers (CASPs)
- Real estate agencies
- Luxury goods traders, including jewellers and car traders
- Professional football clubs and agents
Obliged Entities and Their Responsibilities
| Entity Type | Responsibilities |
| Financial Institutions | Verify transactions above £10,000 |
| CASPs | Apply due diligence for crypto transactions over £1,000 |
| Football Clubs & Agents | Monitor financial transactions |
| Luxury Goods Traders | Report suspicious activity |
Professional football clubs were added to the obliged entities list due to concerns regarding potential risks in financial operations within the sports industry. Member states have the flexibility to remove them from the list if they pose a low risk.
New Supervisory Agency to Oversee Compliance
To ensure the effectiveness of these regulations, the newly created AMLA will be responsible for supervising CASPs and other obliged entities. AMLA’s main tasks include:
- Enforcing due diligence rules
- Developing standards for AML supervision
- Improving coordination among national financial intelligence units (FIUs)
Additionally, FIUs in member states will have immediate access to financial and administrative data, allowing them to swiftly address money laundering concerns. The FIUs will use the upgraded FIU.net system to disseminate cross-border suspicious activity reports efficiently.
Enhanced Due Diligence Requirements
The regulations mandate enhanced due diligence measures for high-risk activities. Financial institutions and CASPs must take additional steps when handling transactions involving high-net-worth individuals or cross-border correspondent relationships.
Key Measures for Enhanced Due Diligence:
- Verify the identity of wallet holders, especially for transactions involving self-hosted wallets.
- Gather information on the source of funds and monitor the movement of digital assets.
- Apply extra scrutiny when the customer is deemed high-risk.
These enhanced measures are crucial for transactions involving non-EU entities, complex ownership structures, or high-value assets. The aim is to mitigate the risk of crypto assets being used for illicit purposes.
Treatment of Self-Hosted Wallets
One of the significant debates during the drafting of the new regulations was around self-hosted wallets. The final regulations exempt providers of self-hosted wallets from direct AML obligations as long as they do not control or manage user assets.
However, CASPs dealing with transactions involving self-hosted wallets are required to:
- Attempt to verify the identity of the wallet owner.
- Use third-party services to ensure that transactions are not linked to suspicious activities.
- Gather additional data about the origin and destination of crypto assets.
This approach balances consumer privacy while ensuring that transactions involving self-hosted wallets are monitored for suspicious activity.
Beneficial Ownership Transparency
The new rules also address beneficial ownership. They aim to make ownership of legal entities more transparent to prevent criminals from hiding behind complex corporate structures. The beneficial ownership threshold has been set at 25%, which means any individual owning 25% or more of an entity must be identified.
Beneficial Ownership Requirements:
- Ownership and control must both be evaluated.
- All foreign entities owning property in the EU since 2014 must register.
- Registers of beneficial ownership will be accessible to public authorities and the general public, given a legitimate interest.
These measures aim to tackle money laundering through real estate and complex corporate setups by ensuring transparency in ownership.
Cash Payments and New Limits
Another aspect of the AML package is the new cash payment limit. To deter money laundering activities, the EU has set a maximum limit of £10,000 for cash payments. Member states are allowed to set a lower limit if they deem it necessary to address local money laundering risks.
In addition, transactions between £3,000 and £10,000 must have the identities of individuals involved verified. This applies to occasional transactions as well, adding an extra layer of security.
High-Risk Third Countries and EU Measures
The new regulations also define how obliged entities must interact with high-risk third countries. Enhanced due diligence measures must be applied to transactions involving countries identified as posing a high risk for money laundering or terrorist financing.
The European Commission will maintain an updated list of these high-risk countries, based on FATF standards. Financial institutions are expected to assess these risks and apply mitigating measures as necessary.
Next Steps for Implementation
The regulations will be reviewed by the Committee of Permanent Representatives and the European Parliament for final approval. Once approved, they will be published in the EU’s Official Journal before entering into force.
The transition period for most obliged entities will be three years, while professional football clubs will have five years to comply. These measures will bring much-needed harmonisation of AML standards across the EU, providing clarity to both service providers and customers.
Timeline for Compliance:
- 3 Years: General obliged entities, including financial institutions and CASPs
- 5 Years: Professional football clubs
FAQ
What are the new AML requirements for crypto casinos?
Crypto casinos must verify customer identities for transactions over £1,000. Anonymous accounts and anonymous cryptocurrencies are now restricted under the new regulations.
Who is responsible for enforcing these new AML rules?
The Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) will oversee compliance with the new AML regulations throughout the European Union.
Are self-hosted wallets affected by these new regulations?
Providers of self-hosted wallets are exempt from direct AML obligations if they do not control user assets. However, CASPs must verify identities when handling transactions involving self-hosted wallets.
What is the cash payment limit under the new AML rules?
The new AML package sets a maximum limit of £10,000 for cash payments. Transactions between £3,000 and £10,000 also require identity verification.
Which sectors are considered obliged entities under the new rules?
The obliged entities include CASPs, financial institutions, luxury goods traders, real estate agencies, and professional football clubs, among others.
When will the new AML regulations come into force?
The regulations will come into force after final approval by the Committee of Permanent Representatives and the European Parliament. Obliged entities will have three to five years to comply, depending on the sector.