EU Strengthens Control of Crypto Transactions Above 1,000 Euros

The European Union (EU) has announced new measures to restrict the use of cash and alternative currencies such as cryptocurrencies for criminal purposes.

by Faruk Imamovic
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EU Strengthens Control of Crypto Transactions Above 1,000 Euros

The European Union (EU) has announced new measures to restrict the use of cash and alternative currencies such as cryptocurrencies for criminal purposes. Under the new rules, payments in cash will be limited to 10,000 euros ($10,557) in all EU countries, with member states allowed to set lower limits if they so choose.

Spain currently has a limit of 1,000 euros ($1,055) for cash payments. However, the European Central Bank (ECB) previously expressed its opposition to such measures, calling them "disproportionate" and potentially harmful to the use of cash as a legal tender.

The new regulations will also affect the gold sector, with increased scrutiny of large cash payments and efforts to make it more difficult to use cryptocurrencies and other assets for money laundering. "Trying to stay anonymous when buying or selling crypto-assets will become much more difficult," said Zbynek Stanjur, minister of finance of the Czech Republic.

"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."

Fight against money laundering

As part of the measures, the EU will introduce a classification system for countries based on their compliance with the recommendations of the Financial Action Task Force (FATF).

This will include grey and black lists. In addition, service providers related to cryptoassets, such as exchanges, will be required to carry out party due diligence when executing transactions of 1,000 euros or more. This means that the origin of the assets must be proven to the exchange when buying or selling cryptocurrencies.

Transactions of any size will also require confirmation of the user's identity. The EU will also subject virtual asset service providers (VASPs) – including exchanges and crypto custody service providers – to the same level of anti-money laundering and anti-terrorist financing controls as other financial institutions.

These companies will be required to introduce risk mitigation measures when dealing with self-hosted wallets and other controls for cross-border payments using cryptocurrency.

European Union Europe
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