EU Sets Up Crypto-focused Anti-Money Laundering Authority

By Mark Hunter

2 days agoFri Feb 23 2024 09:58:46

EU-Sets-Up-Crypto-focused-Anti-Money-Laundering-Authority

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  • The European Union has voted to establish a new Anti-Money Laundering Authority with a special focus on cryptocurrencies
  • Frankfurt, Germany, has been selected as the hub for overseeing anti-money laundering activities across the EU
  • The decision reflects a unified effort to combat the illicit use of cryptocurrencies by criminal groups within the bloc

The European Union has voted to incorporate a new Anti-Money Laundering Authority (AMLA) particularly focused on cryptocurrencies. The decision, announced following a joint vote by the European Parliament and Council, will see the German city of Frankfurt chosen as the nerve center for overseeing anti-money laundering and counter-terrorist financing activities across the EU’s 27 member states. The move illustrates a desire for a more coordinated effort to tackle the misuse of cryptocurrencies by criminal networks within the bloc.

Frankfurt Comes Out on Top

The establishment of the AMLA is part of a broader legislative framework aimed at harmonizing anti-money laundering rules within the EU. Alongside initiatives such as the Markets in Crypto Assets (MiCA) framework, the AMLA will play a crucial role in enhancing cooperation among national authorities and strengthening the bloc’s defenses against financial crime.

With its reputation as a prominent financial hub and its strategic location within Europe, Frankfurt emerged as the preferred choice among nine competing cities, including Rome and Paris, with the factors considered during the selection process including each city’s regulatory environment, infrastructure, accessibility, and capacity to support the operations of the authority.

The decision to select Frankfurt as the seat of the AMLA followed a rigorous evaluation process and underscores Frankfurt’s stature as a financial powerhouse and underscores the EU’s determination to tackle illicit financial activities through comprehensive regulatory measures.

AMLA “Ready to Go”

Speaking at a press conference announcing the AMLA, Mairead McGuinness, European Commissioner for Financial Stability, Financial Services, and Capital Markets Union, emphasized the importance of centralizing regulatory oversight to address risks associated with large cash payments and the anonymity afforded by cryptocurrencies:

[It is] really important that we will now have a single set of rules applicable to the private sector across the single market so no matter where companies are located across the union, they will be subject to the same rules.

McGuinness added that the authority is “ready to go” with its work straight away, which suggests that the newly-elected representatives from each country can forget a Friday morning lie-in.