The European Union (EU) has announced that the Anti-Money Laundering Authority will be based in Frankfurt, Germany. AMLA will monitor high-risk and cross-border financial entities, including those operating within the crypto space, and it will begin working as of mid-2025.
Various financial actors such as banks, payment institutions, crypto-asset service providers, and trust and company service providers are subject to the EU’s anti-money laundering and counter-terrorism financing rules, which the AMLA will oversee.
In addition, AMLA will also work with national financial intelligence units and regulators to ensure that the rules are homogenously applied throughout the EU. The AMLA can also fine or penalize any entity that contravenes these regulations.
The EU Council and European Council decided on the AMLA’s location in Frankfurt based on a proposal by the EC in July 2023. The German financial hub Frankfurt is home to the European Central Bank. Other cities shortlisted to host AMLA included Brussels, Dublin, Madrid, Paris, Rome, Riga, Vilnius, and Vienna.
EU’s Crypto And AI Regulations
The establishment of the AMLA is part of the EU’s broader efforts to regulate the crypto and AI sectors, which are seen as key drivers of innovation and growth but also pose potential risks and challenges. The EU’s first comprehensive crypto framework, the Markets in Crypto-Assets (MiCA) Regulation, entered into force in June 2023.
The MiCA sets out common rules and standards for crypto-asset service providers, such as exchanges, wallets, and custodians. Concerning consumer protection, market integrity, financial stability, and compliance with anti-money laundering rules in the cryptocurrency sector, The MiCA is expected to be fully applicable by December 2024. Still, some provisions will come into force earlier in June 2024.
The European Parliament and the Council accepted the European AI Act as the first AI-focused legislation in the EU in February 2024 after the Commission proposed it in April 2023. The AI Act introduces a risk-based regulation of AI applications, which vary depending on their potential impact on human rights, safety, and security.
The AI Act also introduces safeguards for creators and users of AI-generated content, such as pictures, videos, writing, and music, by conferring intellectual property rights and imposing transparency obligations. The Parliament is expected to vote on the AI Act in April 2024, with it entering into operation by year’s end.
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