EU agrees new security check rules for crypto transfers

30 Jun 2022

Image: © Pawel Litwin/

Crypto firms will have to verify the identity of users and report suspicious transactions under new AML rules in the EU.

The European Union has provisionally agreed on new anti-money laundering (AML) rules to put an end to “the Wild West of unregulated crypto”.

Pushing for greater financial transparency in the sector, officials from the European Parliament and Council reached an agreement yesterday (29 June) that will require crypto firms to check their customers’ identities and report suspicious transactions.

According to the proposed rules, transfers of crypto assets will be traced and identified to prevent money laundering, terrorist financing and other crimes.

Customer identity will have to be verified for even the smallest of crypto transfers between regulated wallets hosted by crypto asset service providers – a move highly criticised by those in the industry.

However, payments to unhosted private wallets will be largely left out of AML checks except in cases where the transactions exceed €1,000. This is a diversion from the Parliament’s initial proposal to check all transactions.

The bill was first introduced a year ago by the European Commission and has been debated by lawmakers in recent months.

“After months of negotiations with the Council, we agreed the most ambitious travel rule for transfers of crypto assets in the world,” tweeted MEP Ernest Urtasun.

“We are putting an end to the Wild West of unregulated crypto, closing major loopholes in the European anti-money laundering rules,” he said, echoing similar statements made by crypto critic Molly White to earlier this month.

While organisations such as US crypto exchange Coinbase have opposed the AML move, MEP Ondřej Kovařík thinks the new rules provide a good balance between security checks and ensuring innovation in the sector.

“EU institutions have found a provisional political agreement on the transfer of funds regulation. I believe it strikes the right balance in mitigating risks for fighting money laundering in the crypto sector without preventing innovation and overburdening businesses,” he tweeted.

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Vish Gain is a journalist with Silicon Republic