Why the latest EU Anti-Money Laundering rules targeting crypto crime make compliance key

When the June 3 deadline for complying with the Sixth Anti-Money Laundering Directive hits, businesses around the world will be legally liable for KYC compliance.

When the European Union’s Sixth Anti-Money Laundering Directive comes fully into force on June 3, every company that provides financial services to cryptocurrency customers and businesses will have to comply with much tougher regulations about when and how they identify customers.

Strictly speaking, the 6AMLD has been in force since December 2020, but crypto service providers outside the EU have another two months to come into full compliance.

This means all e-wallet providers and digital asset exchanges — among others — that have any European customers will need to be registered with EU authorities and perform stricter Know Your Transaction, or KYT, monitoring for illegal activities involving fraud, cybercrime, and money laundering and terrorism financing.

It’s worth noting that 6AMLD is the first Anti-Money Laundering directive to specifically target cybercrimes. In addition, it requires EU member states to work together to investigate and prosecute offenses, and closes a significant number of loopholes.

From a corporate point of view, the potential consequences are both broader and harsher: Unlike the 5th Anti-Money Laundering Directive, 6AMLD holds companies and other legal entities, not just individual employees, directly liable for violations. In practice, this means that companies will no longer be able to simply blame rogue employees. And penalties are stiffer — including heavy fines and even closing down businesses altogether.

This means that it is even more important than ever for cryptocurrency service providers, banks, and financial institutions to ensure that they have compliance strategies in place and staff trained to identify potential criminal behaviors such as money laundering and the financing of both terrorism and nuclear proliferation.

Source: Cointelegraph

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