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Frankfurt Hosts EU's Crypto Anti-Money Laundering Watchdog

The European Union's Anti-Money Laundering Authority is a key component of the EU's comprehensive strategy to counter illicit financial activities. Officials announced that it is poised to commence operations as soon as Friday.

Fri, 23 Feb 2024, 11:28 am UTC

The European Union has designated Frankfurt, Germany, as the location for its newly established Anti-Money Laundering Authority (AMLA), which will directly oversee the crypto sector.

The decision underscores the EU's commitment to bolstering measures against illicit financial activities.

Objective of AMLA

The Frankfurt-based agency, composed of the authority itself and national authorities from the EU's 27 member states, will ensure compliance with all anti-money laundering and counter-terrorist financing obligations set forth by the bloc.

This move reflects the EU's proactive approach to addressing emerging risks associated with money laundering and terrorist financing, particularly in cryptocurrencies.

European Commissioner for Financial Stability, Financial Services and Capital Markets Union, Mairead McGuinness, emphasized the importance of mitigating risks linked to large sums of money, highlighting the EU-wide limit of 10,000 euros for cash payments. McGuinness also underscored the need to address the dangers posed by cryptocurrencies and their anonymity, underscoring the EU's commitment to enhancing regulatory oversight in the financial sector.

Legislative Measures

The establishment of AMLA forms part of a comprehensive legislative package to combat money laundering and terrorism financing across the EU.

This package includes the creation of a single rulebook for all EU member states, ensuring uniformity in regulatory standards and enforcement mechanisms.

According to Coin Desk, recent revisions to the EU's transfer of funds rules (TFR) enable enhanced tracing of cryptocurrency transactions, further strengthening the regulatory framework.

McGuinness highlighted the significance of having a unified set of rules applicable to the private sector across the single market, emphasizing that companies operating within the EU will be subject to consistent regulatory requirements.

According to Bloomberg, she affirmed that AMLA is poised to commence its operations promptly, demonstrating the EU's readiness to address financial integrity concerns effectively.

The selection of Frankfurt as the seat for AMLA follows a rigorous evaluation process involving nine EU cities, including Rome and Paris. The decision was reached through a joint vote of the European Parliament and Council, reflecting a collective commitment to enhancing anti-money laundering efforts within the European Union.

Photo: Microsoft Bing

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