AMLD5 (Anti-Money Laundering Directive 5) is a directive issued by the European Union to prevent money laundering and terrorist financing. The main objective of AMLD5 is to increase transparency, strengthen security measures, and ensure that national governments have access to financial information in order to better detect suspicious activity.
AMLD5 was approved by the European Parliament in April 2018 and came into effect on December 10th 2020. It expands upon previous anti-money laundering directives with stricter regulations for cryptocurrency exchanges, custodian wallet providers, virtual currency exchange service providers, art dealers and real estate agents across all EU member states.
Under AMLD5, companies offering services related to cryptocurrencies must now: identify customers using reliable electronic identification methods; keep records of customer transactions; report any suspicious activities or transactions involving more than €10 000 (or equivalent); monitor clients’ activities on an ongoing basis; verify clients’ identities at least once a year; implement internal policies regarding prevention of money laundering/terrorist financing; provide regulators with access upon request.
Furthermore, cryptocurrency businesses are also required under AMLD5 to register with their local regulator within one year after its implementation date (which was December 10th 2020). Failure to comply will result in fines or other sanctions imposed by the relevant authority.
Finally, it should be noted that while this new law provides greater protection against financial crime activities such as money laundering and terrorist financing through digital currencies like Bitcoin or Ethereum – AML/CFT measures do not apply exclusively only for them but cover all types of payment instruments offered within EU jurisdiction including bank transfers etc..
