Legislators argue that the EU's anti-money-laundering overhaul should target NFT platforms

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Legislators argue that the EU’s anti-money-laundering overhaul should target NFT platforms

Legislators argue that the EU's anti-money-laundering overhaul should target NFT platforms
(EU2017EE Estonian Presidency/Wikimedia Commons)
Source: CoinDesk
1657001145 05 Jul / 06:05

Members of the European Parliament stated in proposed modifications to the legislation released on Monday that NFT trading platforms should be subject to European Union anti-money laundering (AML) rules.

Green Party and socialist legislators prefer adding self-managed crypto wallets and decentralized finance in a planned anti-money laundering bill.

Markets in Crypto Assets Regulation (MiCA) and identity verification requirements for transactions were approved temporarily by the bloc only last week. However, the European Commission was adamant that comprehensive money-laundering processes be left for a broader review that includes industries such as banking.

An amendment to those laundering laws proposed by Ernest Urtasun and Kira Marie Peter-Hansen of the Green Party, along with socialists Aurore Lalucq and Csaba Molnár, aims to make NFT platforms – anyone who acts as an intermediary for importing, minting, or trading the assets that represent proof of ownership of artworks or collectibles – “obliged entities” under EU money laundering law, according to a document dated June 22.

This would necessitate that companies like OpenSea analyze the danger of illegal funds moving through their networks and do identification checks on new clients and questionable transactions, similar to what banks, real estate brokers, art merchants, and other cryptocurrency providers do.

Additional amendments by Urtasun, Peter-Hansen, Lalucq, and Dutch legislator Paul Tang attempt to utilize the legislation to require anti-money-laundering checks on decentralized autonomous organizations (DAOs) and “unhosted wallets” that a registered cryptocurrency service provider does not handle. Due to objections from EU member governments, attempts to do so through MiCA and a similar set of laws known as the Transfer of Funds regulation were largely abandoned.

Gunnar Beck of the right-wing Alternative for Germany party has suggested an amendment to shield cryptocurrencies from the law’s implications, arguing that cryptocurrencies “enable individuals to diversify their portfolios and protect themselves against the hazards of [European Central Bank-induced] currency inflation.”

After a series of scandals in the traditional financial sector involving banks like Denmark’s Danske Bank and Malta’s Pilatus Bank, the EU intends to revamp its money-laundering structure, including establishing a new body to oversee lenders.

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