NFT Platforms Must be Under Anti-Money Laundering Law: EU Lawmakers

The overall crypto industry is undergoing an expansion in the European Union (EU) market. The EU Parliament has proposed some amendments in the anti-money laundering law, specially tailored to include NFT trading platforms. NFT or Non-Fungible Tokens are digital collectibles, built on the blockchain and inspired by an array of things including artwork, celebrities, and video game characters among other real-life elements. The categorisation of NFTs as virtual assets has been a debatable topic in several nations including India and South Korea.

Parliamentarians of the EU have submitted a bunch of potential changes to the anti-money laundering laws. The amendments are aimed at preventing abuse of the financial system for money laundering or terrorism purposes.

The proposal aims to bring “crypto-asset service providers, trading or acting as intermediaries for importing, minting, sale, and purchase of non-fungible crypto-assets” under the scanner of the anti-money laundering regime.

Since NFTs are valuable digital assets and are usually purchased in exchange of cryptocurrencies, they can be exploited as an instrument to facilitate instant cross-border financial transactions.

Hence, the EU lawmakers are taking a cautious approach around curbing the use of NFTs for illicit purposes.

For now, the amendments await relevant approvals. If the proposed changes come into implementation, NFT platforms would become ‘obliged entities’ under EU’s money laundering laws.

Meanwhile, the European Union has recently declared that crypto firms that want to issue and sell digital tokens in an EU state will have to obtain a licence from a national regulator.

The licence will allow operators to serve the whole 27-country bloc from one base, and be liable for losing crypto assets from consumers’ digital wallets.

The deal needs formal rubberstamping by EU states and the European Parliament before it comes into effect — likely 2023 at the earliest.