New Crypto Law Bans Anonymous Payments Over $3k

Key Takeaways:

• The European Parliament approved new Anti-Money Laundering laws on March 19th, banning crypto payments from self-custody wallets.
• The new crypto law will regulate commercial transactions. Payments above €3,000 will be illegal if conducted using non-verified self-custody wallets.

New Regulations

The European Union (EU) introduced its new Anti-Money Laundering Regulation (AMLR) to counter criminal activities and terrorism financing.

The regulations will affect all financial institutions, including Crypto Asset Service Providers (CASPs). As such, the rules apply to anonymous payments using traditional currency as well as crypto assets. Cash transactions above €10,000 will also be banned in business transactions, landing a heavy blow against the belief that cash is king.

The new crypto law will require exchanges and crypto service providers to complete Know-Your-Customer (KYC) identity verification on all users attempting to transact above the threshold. The regulation intends to prevent suspicious transactions and protect service providers from bad actors.

Future Regulations 

Some crypto enthusiasts have branded the new regulations archaic and claimed that they go against the ethos of cryptocurrency.

Other speculators anticipate that the new regulations could lead to stricter oversight in the crypto space. Making it impossible to use cash for business transactions also brings us closer to becoming a cashless society.

The EU will implement these new AML laws over three years. As such, crypto enthusiasts won't see the effects immediately. Therefore, any predictions regarding stricter crypto regulations are purely speculation.

Effects on the Crypto Market

While the crypto community has been up in arms following news of the new regulations, investors will only feel the full brunt of the move once the laws are implemented.

March 19th, the day the European Union passed the new AML regulation, the price of Bitcoin (BTC) tanked by almost 9%, leading to liquidations worth hundreds of millions of dollars.

The following day, BTC quickly retraced its downward movement, rising in price from $61,974 to $67,886, a 9.62% gain. Only time will tell how the new regulations impact the cryptocurrency industry. However, a significant surge in Monero (XMR) transactions and people looking for no-KYC exchanges is likely.