The European Union plans to implement a new regulation on cash payments, establishing a €10,000 limit on cash transactions across member states starting from 10 July 2027. This initiative, known as Regulation (EU) 2024/1624, aims to combat illicit finance by standardizing cash transaction limits throughout the bloc. Member states retain the option to impose even stricter cash limits as necessary.
In conjunction with these cash limits, the regulation introduces significant changes for the crypto sector and other high-risk industries. For instance, new identity verification measures will be mandatory for crypto transactions, and regulated entities will be prohibited from engaging with privacy coins. This regulation also expands Anti-Money Laundering (AML) obligations to sectors including football clubs, crowdfunding platforms, and luxury goods dealers.
#How will cash transactions be affected by the new rules?
Under the upcoming AML regulation, any cash payments exceeding €10,000 will be banned within the EU. Transactions of €3,000 or more will necessitate customer due diligence for service providers, demanding mandatory buyer identity verification. Notably, these restrictions will not apply to deposits or payments made through banks and payment institutions. However, such transactions will still fall under the scrutiny of suspicious activity monitoring and reporting protocols when necessary.
Cash exchanges between individuals without commercial intent remain unaffected, providing some leeway for private transactions.
#What are the new requirements for cryptocurrency transactions?
The regulation places stringent requirements on cryptocurrency service providers, including exchanges and custodians, necessitating comprehensive customer due diligence for crypto transactions that reach €1,000 or more. For transactions under this threshold, basic customer identification will be required, although full verification processes will not be necessary unless it involves ongoing business relationships.
Moreover, accounts that allow for anonymity or enhanced transaction obfuscation, such as privacy coins, are explicitly banned under the new rules, although the ownership of such assets for personal use is not prohibited. This effectively means that regulated platforms will not be able to list or support these privacy-focused crypto assets.
#Which additional sectors now share AML obligations under the regulation?
The regulation broadens the scope of obliged entities, incorporating sectors beyond traditional finance. For example, professional sports clubs, luxury goods dealers, and agents will now be considered obliged entities. Top-tier clubs will need to conduct AML checks for transactions involving investors and sponsors, while exemptions may be available for lower-tier teams, depending on national risk assessments.
Similarly, businesses dealing in high-value items, including expensive vehicles or yachts, must report significant transactions to relevant financial authority units, effectively extending AML oversight into the luxury goods market.
#What does the EU regulation say about beneficial ownership transparency?
A critical component of the EU's new AML regime centers on beneficial ownership transparency. This necessitates that all legal entities in the region disclose and register their ultimate owners within national registries, with the ownership threshold set at 25%. There is potential for this threshold to drop to 15% for high-risk structures.
These requirements extend to non-EU entities engaged in real estate transactions or public business dealings within the EU, along with rigorous reporting obligations imposed on trustees of trusts and foundations to ensure complete transparency and timely updates.
#Are identification requirements imposed on every Bitcoin transaction under the new rules?
The EU's updated AML regulation does not mandate identification for every Bitcoin transaction. It instead manages service providers as defined under the Markets in Crypto-Assets regulation. Transfers conducted between self-hosted wallets by individuals do not fall under these rules. Full identification is only necessary when establishing a business relationship with a crypto service provider, and monitoring activities must be conducted for established customer relationships to identify potential suspicious behavior.
Additionally, under the Travel Rule framework, crypto service providers are required to send sender and recipient information when facilitating transfers that meet or exceed the €1,000 limit, especially when dealing with transfers involving self-hosted wallets. Users will need to complete Know Your Customer processes when using exchanges, but direct transfers between private wallets will not trigger identity obligations under EU law. This maintains Bitcoin’s status outside the need for direct transaction-level identification rules.