On 20 July 2021, the European Commission published a package of legislative proposals to strengthen the fight against money laundering and terrorist financing in the European Union (the "AML/CFT package"). The package comprises four texts: a regulation establishing a European authority to combat money laundering and terrorist financing ("AMLA"), a regulation on combating money laundering and terrorist financing ("AMLR"), a sixth anti-money laundering directive ("AMLD6") and a revision of Regulation 2015/847/EU on money transfers to ensure the traceability of transactions in crypto-assets.

Since the publication of the AML/CFT package, Adan has endeavoured to contribute to proposals on the various texts. In particular, the Association contributed to the debates that led to the political agreement on the recast of the TFR Regulation on 29 July 2022.

This paper focuses on the AMLR, which aims to close the regulatory gap in the fight against money laundering and terrorist financing and to make the implementation of a risk-based approach in the Member States more consistent.

Adan strongly supports the efforts of the European institutions to harmonise anti-money laundering and anti-terrorist financing requirements at EU level and to strengthen Member States' supervision of crypto-asset market activity. The Association and its members are resolutely opposed to any use of crypto-assets for illicit purposes, which harms both businesses and users of this new asset class.

However, Adan is very concerned about certain other provisions in the European Parliament and/or Council positions that introduce legal uncertainty or are not tailored to the specificities of crypto-assets, particularly in the most nascent and innovative areas of the market, and which could therefore have a significant deterrent effect on innovation and Europe's competitiveness.

In summary, the most worrying provisions are as follows:

  1. Ensuring consistency between the AMLR and MiCA regulations.
  2. Maintaining a regulatory framework that encourages innovation in Web 3 while mitigating the high risk of non-compliance associated with regulated entities.
  3. Safeguard the fundamental rights of individuals, such as the protection of privacy in the Web 3 sector.