The 5th Anti-Money Laundering Directive or ‘5AMLD’ is a European Union directive notable for being the first to set out regulatory guidelines on anti-money laundering with the use of cryptocurrencies or blockchain-based assets. 5AMLD came into effect on January 10th, 2020.
As well as the inclusion of crypto-businesses in the directive, 5AMLD sets out that ‘obliged entities’ must take enhanced measures to combat money launderers and terrorist financiers.
According to AMLD5, Virtual currency providers and Custodian wallet providers will be obliged to:
– be registered with the competent domestic authorities
– conduct Customer Due Diligence (the process of collection and evaluation of information and documentation regarding the customer in terms of AML/CTF risks)
– provide the training relating to accurate understating of Anti-Money Laundering Directives for their employees
– have a requirement to retain the documents regarding the conducted CDD and recorded transactions in accordance with national law and share it with FIU or other competent authorities
– report suspicions of money laundering and terrorist financing to FIU based on their ongoing transaction monitoring system
Because the 5th Anti Money Laundering Directive is not a law but a European Union directive, it is up to EU member states to implement it into national legislation and enforce it.