EU legislators argue that money-laundering laws should apply to NFT platforms

Members of the European Parliament argued in proposed changes to the law published on Monday that NFT (non-fungible token) trading platforms should be subject to EU anti-money laundering (AML) laws.

A proposed regulation on money laundering appears to have support from Green Party and Socialist lawmakers for including self-managed cryptocurrency wallets and decentralized finance.

The bloc reached a provisional agreement last week on new regulations known as the Markets in Crypto Assets Regulation (MiCA), which would grant licenses to cryptocurrency businesses and require identity checks for transactions. However, the European Commission was eager to reserve specific money-laundering protocols for a more comprehensive overhaul that also addresses industries like banking.

Ernest Urtasun and Kira Marie Peter-Hansen of the Green Party, along with Aurore Lalucq and Csaba Molnár of the Socialist Party, have proposed a change to those laundering laws that would make NFT platforms - anyone who serves as an intermediary for importing, minting, or trading the assets that serve as proof of ownership of artwork or collectibles - "obliged entities" under EU money-laundering law, according to the document dated

To the same extent as banks, real estate agents, art dealers, and other cryptocurrency providers, companies like NFT marketplace OpenSea might be required to assess the risk of illicit finance flowing through their systems and conduct identity checks on new customers and suspicious transactions.

Urtasun, Peter-Hansen, Lalucq, and Dutch lawmaker Paul Tang have proposed additional amendments that would use the law to impose laundering controls on decentralized autonomous organizations and "unhosted wallets" that are not run by regulated crypto providers. Following opposition from EU member governments, an attempt to accomplish this via MiCA and a separate set of regulations known as the Transfer of Funds regulation was largely abandoned.

Gunnar Beck of the right-wing Alternative for Germany party suggested another change that would shield cryptocurrencies from the legal ramifications, claiming that they "“make it possible for people to diversify their portfolio and protect themselves from risks of [European Central Bank]-induced euro inflation."

Following a string of scandals in the traditional financial sector, including those involving companies like Denmark's Danske Bank and Malta's Pilatus Bank, the EU is looking to overhaul its anti-money-laundering framework, including by establishing a new agency to regulate lenders.

By fLEXI tEAM