NFT Platforms to be Bound by EU Anti-money Laundering Act

03/03/2023 15:35 • AI & Tech Insights • 67 views

On March 3, the policy makers of the European Parliament are negotiating to amend the text of the EU Anti-money Laundering Act to emphasize that the NFT platform or other companies providing NFT-related services are bound by the regulation. This is different from the scope of the standard cryptocurrency rulebook set by the EU, and the cryptocurrency asset market regulation explicitly excludes them.

The new anti-money laundering act of the European Union stipulates that the NFT platform is subject to this regulation

Interpretation of the news:

The European Parliament is set to amend the EU Anti-money Laundering Act to include NFT platforms and other companies that provide NFT-related services. The policy makers are scheduled to negotiate on this matter on March 3, 2021.

Under the current regulation, NFT platforms are not included in the standard cryptocurrency rulebook set by the EU. Additionally, the regulation for the cryptocurrency asset market explicitly excludes NFTs. This means that NFT platforms are not bound by any EU regulation that seeks to counter the risk of money laundering and terrorist financing.

However, with the proposed amendment, NFT platforms and other companies providing NFT-related services will be required to comply with the Anti-money Laundering Act. Money laundering has become an escalating issue in the crypto market, and regulators continue to be concerned about the lack of oversight of NFT transactions.

The art industry, in particular, has seen an influx of NFT sales, and there have been concerns that NFTs could be used to launder money or hide assets. As a result, the Financial Action Task Force (FATF) has called for greater regulation of NFTs.

The amended act will require NFT platforms to identify their users and conduct investigations on transactions that seem suspicious. They will also be required to register with their respective national authority and comply with other compliance-related requirements such as risk assessments, internal control mechanisms, and employee training.

In conclusion, the proposed amendment to the EU Anti-money Laundering Act is a significant step towards reducing the risk of money laundering and terrorist financing in the NFT market. With the rise of NFTs, it is essential to have proper oversight and regulation to ensure that the market operates in a transparent and accountable manner.

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