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Lawmakers on European Parliaments Economics and Civil Liberties committees voted in favor of the anti-money laundering regulation. This will impose a $1,000 cap on unverified crypto wallets on Tuesday. The limit represents a part of the EUs overhaul of its anti-money laundering (AML) regulations, which will also apply to decentralized autonomous organizations (DAOs), non-fungible token (NFT) platforms, and decentralized finance (DeFi) platforms.

European lawmakers have voted to impose a $1,000 cap on payments by anonymous crypto users, marking the blocs latest push in its revamp of money laundering laws. 99 lawmakers voted for imposing the limits, while eight voted against them.

Lawmaker Damien Carme, the lead negotiator of the revamp talks, previously said that the limits would not prohibit crypto payments because the $1,000 cap only applies to unregulated wallet providers and unverified wallets. The European Parliaments Economics and Civil Liberties committees approved the plans following the vote.

We are absolutely not preventing crypto transactions. Its just when identification isnt possible.

After several weeks of negotiations, the AML regulation will advance to a plenary vote in the Parliament. After that, it will allow inter-institutional negotiations between the Parliament, Council, and the European Commission to begin.

The vote comes several months after a leaked draft of the EUs money laundering bill showed that the bloc was planning to ban crypto providers from listing privacy-enhancing cryptocurrencies such as monero, dash, and zcash. However, Carme said a ban on such coins was unnecessary given that they were already prohibited under the EUs Markets in Crypto Assets regulation (MiCA).

Apart from the limit on unverified crypto wallets, the EUs AML regulation has several other implications for crypto. More specifically, the new AML rules will also cover DAOs, as well as NFT and DeFi platforms.

These companies will be required to comply with the AML rules as long as they remain controlled directly or indirectly, including through smart contracts or voting protocols, by identifiable natural and legal persons, according to the Block. Earlier this year, the EU considered easing regulatory requirements for smart contracts after policymakers agreed on a new text of the Data Act.

Unlike the MiCA, the AML regulation counts decentralized platforms as obliged entities to reduce the current regulatory gap in the region. According to Carme, decentralized platforms will be required to conduct due diligence and report questionable transactions to the authorities just like traditional financial institutions and real estate agents.

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About the author

Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.

Originally posted here:

EU Votes for AML Regulation: $1,000 Limit on Anon Crypto Transfers - The Tokenist