The prevention of money laundering is a key activity in financial systems and comprises checks on deposits or transfers of sums of money above a certain amount. The goal is to determine the origin of the assets as well as the identification of the owners of the assets (KYC). Regulations are enacted by the European Union (EU) as well as by individual countries. In Germany, for example, the money laundering act (GwG) implements the EU’’s money laundering directive. According to this directive, cash payments are limited to an amount of 2000 € since 2020 without being subject to a money laundering audit and cross-border cash amounts in excess of 10,000 € require a declaration within the EU. With the amendment of the fourth EU money laundering directive (Directive EU 2018/843), the regulations also apply to crypto custody transactions, which makes digital currencies such as Bitcoin also subject to money laundering checks. Financial service providers have traditionally implemented such compliance checks in their internal application systems, but external service providers with service offerings in this regtech segment (e.g., the Estonian provider Salv) have recently emerged.
More Term Definitions
