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 crypto 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 5AMLD, crypto asset providers and custodians/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.