Europe's new course: crypto regulation on the path to systemic importance

The European Union is increasingly targeting the crypto industry – not out of general mistrust of technological innovation, but in response to a new risk assessment: according to the new European money laundering authority AMLA, cryptocurrencies are considered one of the greatest current threats to the financial system’s integrity. 

The European triad for coherent crypto supervision 

With the combination of AMLA, MiCAR, and the mandatory implementation of the “Travel Rule,” the EU is for the first time creating a coherent and cross-border regulatory framework. This positions Europe as a global pioneer in crypto supervision and sets new standards for market participants, supervisory authorities, and investors.  

AMLA – Europe's new money laundering watchdog 

With the Anti-Money Laundering Authority (AMLA), the EU aims to coordinate and standardize the combat against money laundering across Europe. The authority was officially launched in July 2025. From 2028, it will take over direct supervision of particularly high-risk financial institutions, including selected crypto service providers. 

For providers of digital assets, this means a noticeable tightening of regulatory requirements. The AMLA plans to systematically include crypto companies in the group of particularly high-risk market participants. This will be accompanied by significantly increased requirements for internal governance structures, in particular with regard to embedding money laundering prevention at the executive board level, as well as the implementation of effective risk management systems. 

In addition, the current practice of nationally varying licensing and supervisory models is to be avoided in the future. AMLA aims to harmonize supervisory practices, creating greater legal certainty and uniform requirements, in particular for internationally operating providers. 

MiCAR – Uniform regulatory framework for crypto-assets 

With the Markets in Crypto-Assets Regulation (MiCAR), the EU is introducing its first EU-wide regulatory framework for digital assets. The regulation covers, in particular, stablecoins, utility tokens, and crypto service providers such as wallet providers, trading platforms, and brokers. 

Even though MiCAR is not primarily designed as a money laundering regulation, it nevertheless represents a crucial building block for strengthening market transparency and integrity. The regulation requires all relevant players to obtain a license from national supervisory authorities in accordance with uniform EU-wide criteria. In addition, comprehensive transparency obligations, IT security requirements, and clear consumer protection guidelines are being introduced. 

MiCAR thus forms the regulatory basis on which the AMLA can build its supervision of crypto companies. Providers must prepare for detailed requirements regarding corporate governance, risk management, and market conduct. 

Travel Rule – The “EU breakthrough” in crypto transparency 

Another key component of the new EU regulatory framework is the mandatory implementation of the “Travel Rule”. With this regulation, which was already formulated in 2019 by the Financial Action Task Force (FATF) in its Recommendation 16, the EU is applying the requirements for traditional financial transactions to the crypto sector. 

The Rule requires all crypto service providers within the EU to collect and verify information about both the sender and the recipient of transactions and to transmit this information together with the transaction. This applies regardless of the amount of the transaction and affects all transfers involving an EU-based provider. 

For the industry, this involves high technical requirements. Providers must set up interfaces for data transmission, implement identity verification systems, and at the same time comply with data protection regulations. The regulation aims to make pseudonymous crypto transactions transparent and thus prevent money laundering, terrorist financing, and sanctions evasion. 

Implications for European and international crypto providers 

For European crypto providers, the new regulatory regime represents a turning point. In the future, licensing will be regulated uniformly at the EU level, making regulatory arbitrage – the deliberate selection of particularly lenient supervisory authorities – virtually impossible. 

Furthermore, all providers will be required to implement a consistent and demonstrably effective system for preventing money laundering. The requirements go far beyond the formal existence of a money laundering/compliance department. Rather, they also involve competencies at the executive board level, automated transaction monitoring, as well as effective sanctions and KYC checks. 

The new regulatory framework is no less important for providers wishing to operate in the EU. In future, international providers will have to demonstrate MiCAR- and AMLA-compliant processes and structures in order to do business in the EU. This has far-reaching implications for the business models of many global crypto exchanges, stablecoin issuers, and DeFi platforms. 

Furthermore, it is already becoming apparent that European regulation – similar to the GDPR – is being perceived internationally as a model. A “Brussels effect,” in which other jurisdictions adopt European standards, is quite likely. Providers that are EU-compliant today could thus also benefit globally from a regulatory advantage in terms of trust. 

Why was this long overdue?

Previous regulatory practice in Europe has been characterized by national “solo efforts.” While countries such as Germany already imposed strict requirements on crypto service providers, a simple registration without in-depth examination was sufficient in other member states. 

This regulatory inconsistency not only led to competitive imbalance, but also to real risks for market integrity. Until now, crypto service providers have been able to specifically choose those jurisdictions that imposed the lowest requirements on them. 

The new European framework aims to put an end to this situation. The EU is creating an integrated regulatory model that is based on the requirements of the traditional financial system and equally regulates digital assets. 

Conclusion: Crypto is welcome in Europe, but the requirements are strict

The introduction of the AMLA, the implementation of MiCAR, and the mandatory Travel Rule mark a paradigm shift in European crypto regulation. The EU is focusing on transparency, legal certainty, and harmonization, thereby establishing itself as an international standard-setter. 

For providers of digital assets, this is both a challenge and an opportunity. Providers investing in compliance structures at an early stage, implementing regulatory requirements, and creating transparency will be able to position themselves as trustworthy partners for institutional investors, banks, and supervisory authorities in the future. 

The AMLA's message is clear: crypto is welcome in Europe – but only if it is responsible, regulated, and in line with the fundamental values of the European financial system.