In a significant development aimed at enhancing the regulatory framework for the cryptocurrency sector, the <a href="https://www.cryptopolitan.com/eus-crypto-tax-game-changing-move/">European Council</a> and Parliament have reached a provisional agreement on certain aspects of a new anti-money laundering (AML) package.&nbsp; 
This agreement is set to impose more stringent rules on cryptocurrency firms operating within the European Union (EU). 
The proposed regulations are designed to cover a substantial portion of the crypto sector, requiring these firms to conduct due diligence on their customers, particularly in transactions valued at or above €1,000 (approximately $1,090). 
<h2 class="wp-block-heading" id="european-council-stricter-due-diligence-rules-for-crypto-firms">European Council stricter due diligence rules for crypto firms</h2> 
Under the provisional agreement, cryptocurrency firms within the EU will be obligated to conduct thorough due diligence on transactions involving amounts exceeding €1,000. 
This represents a crucial step in strengthening the AML measures applied to the crypto industry, aiming to mitigate the risks associated with illicit financial activities.&nbsp; 
Furthermore, the agreement introduces additional safeguards concerning transactions involving self-hosted wallets. 
The <a href="https://www.consilium.europa.eu/en/press/press-releases/2024/01/18/anti-money-laundering-council-and-parliament-strike-deal-on-stricter-rules/" rel="nofollow noopener" target="_blank">proposal</a> seeks to establish a comprehensive regulatory framework that effectively addresses concerns related to money laundering, terrorist financing, and other illicit activities that may exploit the cryptocurrency sector for their purposes. 
<h2 class="wp-block-heading" id="pending-approval-by-the-european-parliament">Pending approval by the European Parliament</h2> 
While this provisional agreement marks a significant milestone, it is important to note that the proposed regulations are not yet set in stone. The next step in the process involves presenting the agreement to the European Parliament for approval.&nbsp; 
If the European Parliament endorses the proposal, the Council and Parliament will then formally adopt the texts. Subsequently, these regulations will be published in the EU’s Official Journal, officially coming into force. 
The decision rests in the hands of the European Parliament, which will thoroughly review the proposed rules before making a final determination. This democratic process ensures that all perspectives are considered, and any potential concerns are addressed before the regulations become binding. 
<h2 class="wp-block-heading" id="strengthening-the-eu-s-aml-system">Strengthening the EU’s AML system</h2> 
Vincent Van Peteghem, the Belgian Minister of Finance, emphasized that the provisional agreement is a crucial element of the EU’s new AML system. He highlighted the importance of these regulations in preventing fraudsters, organized crime groups, and terrorists from legitimizing their ill-gotten gains through the financial system.&nbsp; 
The EU is committed to maintaining the integrity of its financial sector and thwarting attempts to exploit digital assets for illicit purposes. 
This recent development builds upon the European Union’s ongoing efforts to establish a robust regulatory framework for cryptocurrencies and digital assets. 
Last year, the EU introduced the Markets in Crypto Assets (<a href="https://www.cryptopolitan.com/european-union-council-agrees-to-adopt-mica/">MiCA</a>) regulation, a comprehensive set of rules that provided clarity on the scope and definitions of crypto-related regulations.&nbsp; 
MiCA aimed to create a safer and more transparent environment for cryptocurrency activities within the EU.

European Council and Parliament reach agreement on crypto due diligence measures

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