EU AML Rules for Crypto Companies: What You Must Know

EU AML regulations for crypto businesses is a unified legal framework that forces digital‑asset firms to fight money‑laundering and terrorist‑financing risks across all 27 member states. It blends directives, regulations and authority‑level rules that started with AMLD5 in 2020 and will culminate in the EU‑wide AML Regulation in 2027. If you run an exchange, custodial wallet, DeFi platform or any service that moves crypto, you need a clear roadmap to stay compliant and avoid hefty fines.

How the EU got here: a quick timeline

Understanding where the rules come from helps you see why each piece matters.

• AMLD5 (Jan 2020) - first EU directive to pull fiat‑to‑crypto exchanges and custodial wallets into AML oversight.
• AMLD6 (2022) - added stricter penalties, a harmonized list of predicate offences and senior‑management liability.
• MiCA (full effect 2024) - introduced a licensing regime for Crypto‑Asset Service Providers (CASPs) and set market‑integrity standards.
• Travel Rule (Transfer of Funds Regulation, 2023) - obliges every crypto transfer to carry full sender/receiver data, no minimum threshold.
• DORA (Jan 2025) - requires robust ICT resilience against cyber‑attacks.
• AMLA (2025) - the new EU Anti‑Money‑Laundering Authority that coordinates supervision.
• EU‑wide AML Regulation (July 2027) - will replace the older directives with a single rulebook.

Core AML components you must implement

All of these sit on top of each other, so missing one can trigger a breach.

1. Customer Due Diligence (CDD) - tiered verification:
   • Basic: name + address for transactions < €1,000.
   • Enhanced: ID document for €1,000‑€10,000.
   • Strict Enhanced: source‑of‑funds check & senior‑approval for > €10,000.
2. Appoint a dedicated Money Laundering Reporting Officer (MLRO) who signs off all Suspicious Transaction Reports (STRs).
3. Maintain an internal AML policy, risk‑assessment report and annual training (40 h for compliance staff, 16 h for ops staff - per ESMA guidelines).
4. Implement the Travel Rule data capture: originator name, account number, physical address or DOB; beneficiary name, account number, physical address.
5. Integrate with 28 national Financial Intelligence Units (FIUs). Most firms use a middleware like Traveler to cut integration time from six months to eight weeks.
6. Ensure ICT systems meet DORA resilience standards - regular penetration testing, backup redundancy and incident‑response plans.

Step‑by‑step compliance roadmap

Turn the abstract rules into concrete actions.

1. Map your service type: exchange, custodial wallet, DeFi protocol, or hybrid. Identify which EU licences (MiCA, AMLD5/6) apply.
2. Run a risk‑based assessment (use the AMLA 2025 work‑program template). Document high‑risk jurisdictions, transaction volumes and privacy‑enhancing tech used.
3. Build a KYC/AML stack:
   • Identity verification provider (e.g., Onfido, Veriff).
   • Travel Rule engine - either in‑house or SaaS (Traveler, Chainalysis KYT).
   • Transaction monitoring system tuned to crypto‑specific red flags (rapid volume spikes, mixed‑coin mixers, cross‑chain bridges).
4. Hire or designate an MLRO. Draft internal procedures for STR filing, escalation and record‑keeping (minimum five‑year archive).
5. Connect to each national FIU. Allocate €185,000 per connection - budget accordingly or negotiate bulk‑integration discounts.
6. Train staff. Keep a log of completed hours and pass quarterly knowledge quizzes (required by ESMA).
7. Run a pre‑audit with an external AML consultancy. Fix gaps before the AMLA supervisory review scheduled for Q2 2026.

Common challenges and practical tips

Even big players hit snags. Here’s what works.

• Cost pressure on SMEs - you can share a compliance platform with a partner or join a crypto‑industry compliance consortium that spreads licensing fees.
• DeFi supervision - treat the protocol’s governing DAO as the ‘legal entity’. Register a legal wrapper (e.g., a Dutch foundation) to satisfy AMLA’s “beneficial‑owner” rules.
• Data‑privacy concerns - perform impact assessments that balance GDPR with AML data‑collection. Document legitimate‑interest justifications for each data field.
• Cross‑border reporting speed - set internal SLA of five working days for FIU responses, matching the upcoming 2027 AML Regulation deadline.

Future outlook: the 2027 AML Regulation

What’s coming next, and how to prepare now.

The regulation will tighten due‑diligence deadlines, lower the cash‑payment ceiling to €10,000, and expand obliged entities to include crypto‑fundraisers, professional sports agents and high‑value‑goods traders. It also promises a Europe‑wide five‑day response window for FIU queries - meaning you should already have automated query‑handling in place.

Experts estimate another 40‑55 % drop in illicit crypto flows by 2028 if firms adopt the full suite now. That translates into a competitive edge: regulated CASPs currently capture 89 % of institutional crypto business in the EU.

Quick compliance checklist

Frequently Asked Questions

Staying ahead of EU AML requirements isn’t just about avoiding fines - it’s about building trust with investors, banks and customers. By following the roadmap above, crypto firms can turn compliance into a competitive advantage and prepare for the next wave of regulation that arrives in 2027.