Anti-Money Laundering Regulation comprises a set of laws and rules designed to prevent funds obtained from criminal activities from appearing legitimate. These regulations require financial institutions and certain other businesses, including those dealing with digital assets, to report suspicious transactions and verify customer identities. The framework aims to disrupt financial crime networks by making it difficult to disguise illicit proceeds. Compliance involves robust internal controls and ongoing monitoring of transactions.
Context
The application of Anti-Money Laundering Regulation to the cryptocurrency sector presents ongoing challenges due to the decentralized and pseudonymous nature of many digital assets. A key discussion revolves around adapting existing rules to effectively address new technologies without stifling innovation. Future developments will likely involve increased international cooperation to establish consistent global standards and enhanced technological solutions for compliance in decentralized finance.
CASPs must integrate bank-level AML/KYC for transactions exceeding €1,000 and cease offering anonymous wallets, fundamentally altering the EU's compliance architecture.
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