What is AML?

As the adoption of cryptocurrencies continues, market participants are getting serious about Anti-money laundering compliance. Authorities have fought associated with the AML risk crypto posed for years, but countries like Switzerland and Japan have adopted a considerable approach allowing for investment and trade, on the other hand, spectrum South Korea and China are opting for strict restrictions on mining and exchanges. Money laundering rules for crypto businesses have become a standard.

As crypto exchanges become increasingly widespread, regulators are expanding their reach to manage crypto exchanges and enforce robust checks in regards to KYC and AML. This effort will harmonize identity verification and anti-fraud efforts across all financial exchange types.

Highlighting this push, in 2020 the EU set out its Digital Finance Package that encompasses digital finance in economic recovery and looks to standardize a single digital market – encompassing blockchain and AI and including anti-money laundering (AML) and counter-terrorism financing (CTF).

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Markets in Crypto-Assets Regulation in the EU

Also several juristications are creating further initiatives in order to regulate crypto. One example is Markets in Crypto-Assets Regulation (MiCAR), which was presented by the European Commission. With MiCAR an Europe-wide regulation of crypto-assets is now in sight. The European Commission presented its proposal for this regulation as part of its Digital Finance Package in September 2020. The MiCAR is intended to come into force in 2022 and then be directly applicable in all Member States after a transition period of 18 months (Art. 136 para. 2 MiCAR).