European Union Reaches Agreement To Track Crypto Transactions Over 1,000 Euros

All crypto-asset service providers will have to conduct due diligence on their customers as the new EU anti-money laundering guidelines will be implemented in the entire crypto sector.

The European Union countries have agreed to set a new limit on cash purchases in order to ensure stronger control of cryptocurrency transactions in the region. The bloc of states has approved 10,000 Euros ($10,557) limit on all payments related to cash. The EU has also agreed to establish that crypto transactions of over 1,000 Euros ($1,055) will be made to undergo proper scrutiny as well as checks and balances. All these will be applicable to the EU states as the bloc has announced a new set of directives to make cash and crypto transactions tougher and more difficult than before. It said that "by limiting large cash payments, the EU will make it harder for criminals to launder dirty money."

The current move is expected to fight and tackle the threat of money laundering and terror financing in the region. The fresh EU guidelines said, "All crypto-asset service providers (CASPs) will have to conduct due diligence on their customers. This means they will have to verify facts and information about their customers." It also added there should be measures to mitigate risks in relation to transactions with self-hosted wallets.

Zbynek Stanjur, minister of finance of the Czech Republic, said, "Large cash payments beyond €10.000 will become impossible. Trying to stay anonymous when buying or selling crypto-assets will become much more difficult."

At present, Spain has the lowest limits to be imposed on cash transactions, as it permits the usage of cash payments up to 1,000 Euros ($1,055). Though, the European Central Bank (ECB) had opposed this move in 2018, according to a report by Bitcoin. However, member countries of the bloc will be allowed to reduce the current limit on crypto and cash transactions in the future.

The move is expected to be implemented in several other sectors, such as jewelry, goldsmithing, persons trading in precious metals and tools, and cultural goods that "will also be subject to the obligations of the regulation." Stanjura said, "Hiding behind multiple layers of ownership of companies won’t work anymore. It will even become difficult to launder dirty money via jewelers or goldsmiths."

The new directives are aimed at protecting the EU's financial system against money laundering and terrorist financing in the area. Commenting on this, Satanjura said, "Terrorists and those who finance them are not welcome in Europe. In order to launder dirty money, criminal individuals and organisations had to look for loopholes in our existing rules which are already quite strict. But our intention is to close these loopholes further, and to apply even stricter rules in all EU member states."

The council will soon start trilogue negotiations with the European Parliament in order to agree on a final version of the texts.

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