The European Union reportedly plans to gives its new anti-money laundering (AML) agency oversight of crypto companies amid concern digital assets could be used to circumvent current controls.
The new regulator will likely begin operations in the next two years, Bloomberg reported on Tuesday, citing people familiar with the plans. Officials from Germany are reportedly at the forefront of setting up the agency, with support from counterparts in Italy, Luxembourg, Austria, Spain and The Netherlands.
The push to add crypto AML monitoring to the proposed agency’s oversight remit is being linked to fears that crypto opens up new ways of funneling dirty money.
If the agency does come online, it could change the current landscape of crypto AML policing in Europe, which is currently the exclusive reserve of national bodies. According to proponents of the yet-to-be-created agency, an EU-wide approach to cryptocurrency AML oversight could help to eliminate regulatory arbitrage.
In its 2021 crypto crime report, blockchain intelligence outfit Chainalysis stated that cryptocurrency-linked money laundering grew by 30% last year. The decentralized finance space also saw a 20-fold increase in money laundering-related cases. The report also highlighted, however, that legitimate transactions far exceeded criminal payments.