The European Parliament has passed a law that entails the implementation of tougher rules for crypto-asset exchange service providers (CASPs). These new rules improve identity verification and require companies to spot suspicious activities to combat money laundering.
Crypto exchanges and gambling services that operate in a centralized manner are affected by this law. The law is meant to limit the operations of illicit activities connected to this sector. These rules also apply to all CASPs, the regulatory subjects under the Markets in Crypto-Assets Regulation (MiCA).
The law tackles privacy threats connected with cryptocurrency transactions by banning anonymity tools, crypto mixing services, and privacy coins. These measures are part of a comprehensive strategy for the surveillance of crypto transactions through monitoring and controlling financial crimes among them.
Crypto companies will now have to follow the customer due diligence process and Know Your Customer (KYC) procedures more stringently, rather than less cautiously. This will entail validating their users’ identities and keeping detailed transaction records, particularly where transactions exceed €1,000.
