EU Member States Plan to Create Anti-Money Laundering Regulators to Regulate Crypto Firms by 2024

According to reports, the European Commission, in coordination with other authorities, plans to have its financial surveillance team conduct potential oversight of illicit transactions by crypto firms.

A number of EU member states, led by Germany and including the Netherlands, Spain, Austria, Italy and Luxembourg, plan to bring crypto firms under the purview of an anti-money laundering-focused group, allegedly the European Commission’s anti-money laundering arm, Bloomberg reported Tuesday. , the agency first proposed in July 2021. According to reports, the agency will begin operations in 2024 and be "fully operational" by 2026.

Putting crypto firms on the agenda of anti-money laundering regulators aims to provide clearer coverage of cryptocurrency transactions under EU regulations on financial services, an EU diplomat reportedly said. Bloomberg reported that the unnamed official wanted the group to focus on high-risk cross-border transactions facilitated by crypto service providers as well as banks and other financial institutions. However, the proposed framework has not yet been discussed by EU member states.

Luis Garicano, a member of the European Parliament, said: "Given that crypto assets are one of the areas more prone to money laundering, it is key that the regulatory scope of the new EU authorities explicitly includes crypto assets."

If established, the anti-money laundering watchdog would be one of the first with the power to oversee money laundering across a wide swath of Europe. A January report by Chainalysis revealed that individuals laundered $8.6 billion in cryptocurrencies in 2021, a 25% increase from 2020.

In the United States, U.S. Deputy Attorney General Lisa Monaco announced on Feb. 17 that the FBI would create a “team dedicated to cryptocurrencies” to track and seize illicitly used funds. The formation of the team comes more than four months after the U.S. Department of Justice established the National Cryptocurrency Enforcement Team, led by Eun Young Choi, a former senior adviser to the deputy attorney general.

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