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DeFi Transfers Could Be Considered High-Risk under New Anti-Money Laundering Rules in EU

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It is reported that according to the latest version of EU anti-money laundering regulations, the transfer with DeFi may be classified as high-risk. After the E…

DeFi Transfers Could Be Considered High-Risk under New Anti-Money Laundering Rules in EU

It is reported that according to the latest version of EU anti-money laundering regulations, the transfer with DeFi may be classified as high-risk. After the European Parliament members meet next week, the text may have more changes.

DeFi is called “high risk” in the latest draft anti-money laundering bill of the EU

Analysis based on this information:


The latest version of the EU anti-money laundering regulations has raised concerns among DeFi advocates as it may classify their transfers as high-risk. This could potentially impact the decentralized finance (DeFi) industry, which has been gaining momentum in recent years for its borderless, transparent, and secure financial services.

According to reports, the EU’s new rules aim to prevent the misuse of the financial system by terrorists and criminals. While the intention is noble, the definition of what constitutes high-risk business activities remains somewhat ambiguous. As a result, DeFi transfers may be mistakenly identified as such without proper contextual analysis.

One major concern is that such a classification may discourage financial institutions from working with DeFi projects. Under the current regulations, certain businesses are obliged to conduct enhanced know-your-customer (KYC) and due diligence checks on high-risk clients. If DeFi transfers do fall under this category, financial institutions may be reluctant to collaborate with them due to the cost and complexity associated with KYC and due diligence.

For DeFi enthusiasts, this could be a frustrating setback. The industry has been thriving as it offers innovative financial solutions that are accessible to a wider range of users across the globe. DeFi has also been praised for its ability to promote financial inclusion and reduce the dominance of traditional financial institutions.

However, it is important to recognize that anti-money laundering regulations serve a vital role in maintaining the integrity of the financial system. DeFi projects must ensure they operate in compliance with these regulations to avoid any potential legal issues. Moreover, the EU is still in the process of refining the rules, and there may be more changes made after the European Parliament members meet next week.

In conclusion, the EU’s new anti-money laundering regulations could have significant implications for DeFi transfers, potentially causing financial institutions to view them as high-risk. As the industry continues to evolve, it is important for DeFi projects to remain vigilant and ensure they operate within the scope of legal compliance.

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