EU Parliament Proposes Change in AML Bill to Increase Focus on NFTs

Lawmakers in the EU Parliament have proposed new changes for the upcoming AML bill to increase focus on NFT platforms and firms under the scope of the regulation.

The new changes to the EU Anti-money laundering bill will bridge a significant gap between the EU’s landmark MiCA (Markets in Crypto-Assets) regulation, which currently does not include the Non-fungible tokens in its remit. 

“NFT platforms are not covered in the current definition of crypto-assets service providers under the MiCA Regulation to the extent they do not provide services in crypto-assets that are fungible and non-unique,” stated a leaked draft of the AML proposal and was reportedly confirmed by sources present in the negotiations.

The proposal concluded that “in order to close this gap and mitigate associated money laundering and terrorist financing risks, NFT platforms should therefore be included in the horizontal AML/CFT framework as a separate category of obliged entities.”

The new draft seems to confirm the reports from September 2022, that the European Parliament was pushing for the inclusion of decentralised finance, DAO (Decentralised Autonomous Organisations) and NFTs into AML provisions. These areas were left out under the EU’s original proposal for the incoming AML/CFT legislation. 

The latest update arrived after the news of January 2023, which stated that French regulators were imposing stricter regulations to prevent the repeat of the 2022 crises and collapse in the digital asset space. The leaked segments of the AML proposal further indicates that the EU is keen to keep no digital asset stone unturned in imposing regulatory changes. 

The bill amendments require a vote on March 28, followed by a vote on the whole text, but should it go via the platform operators and NFT issuers who assumed that they were off the hook will need to pay more emphasis on the AML guidelines when it comes into force. In case of failure, they could find themselves in conflict with the EU’s new AML authority. 

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