European Parliament approves new crypto rules

Know-your-customer procedure requirements extend to the gambling sector as well

The European Parliament has authorized new regulations to fight against money laundering. These rules target digital asset firms and require them to conduct strict due diligence checks, with the aim of curbing illegal financial flows within the crypto industry. They fall under the newly created Markets in Crypto-Assets (MiCA) law and apply to all crypto-asset service providers (CASPs).

According to the law, cryptocurrency exchanges operating in the European Union will have to follow stricter know-your-customer (KYC) procedures. This involves offering services such as exchanging digital currencies for fiat money and providing custodial wallets among others. The impetus behind these measures comes from rapid technological change coupled with evolving Financial Action Task Force (FATF) standards.

It is interesting that these regulations do not only cover traditional finance but also extend into gambling sectors. Therefore, all operators including UK casinos not on GamStop which use cryptocurrencies must now put in place more robust customer identification processes so as to ensure compliance with this legislation.

Patrick Hansen, Circle’s director of EU strategy and policy, took to X (formerly Twitter) to share some insights about what this new law entails. He said that CASPs will no longer be allowed to serve anonymous clients – something already prohibited by existing anti-money laundering (AML) laws. In addition, cryptocurrencies that offer anonymity by design are banned under MiCA.

Enforcement of stringent KYC rules will be handled by the Anti-Money Laundering and Countering Financing of Terrorism Authority (AMLA), based in Frankfurt, Germany. While waiting for the formal adoption of the law, AMLA is readying itself for full enforcement powers as well as oversight responsibilities.

These are landmark regulations that should not be underestimated since they indicate a turning point toward clearing up the crypto space while allowing much-needed security among various players in the sector. Furthermore, they represent positive developments for digital currencies by attracting interest from conventional financial establishments.

Speaking in a recent interview, Lukas Enzersdorfer-Konrad who is Bitpanda’s deputy CEO highlighted the growing participation of traditional finance players within the crypto sector. He mentioned that the upcoming MiCA regulation was providing clear guidelines for institutions which are eager to partner with technically skilled crypto service providers. 

For example, Raiffeisen, Austria's largest community banking group, and Landesbank Baden-Württemberg, Germany’s biggest state-owned bank, have already joined hands with Bitpanda to offer their customers access to cryptocurrencies.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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