The anti-money laundering (AML) and know your customer (KYC) regulation in Europe and globally have gone through various structural changes in the last few years. The penetration of illicit funds and high-end money laundering schemes have now managed to get the attention of the public and regulators. The most notable example is the Wirecard scandal which revealed that several shell companies were involved in the illegal distribution of pornography and narcotics. As financial institutions and regulators tend to expand their knowledge on criminal practices, the AML requirements are also expected to be improved. In most cases, these trials have been reactive overwhelmingly, and it is mostly a trial-by-fire process.
The European Union has now started to introduce more rigid regulations to meet the ever-evolving challenges in blockchain, and it is also striving hard to improve the licensing model. Most of the countries are now trying to regulate the use of cryptocurrencies, and Germany is way ahead of others and is leading from the front. The regulatory bodies must also evolve along with the cryptos and financial crimes to address, monitor, and enforce regulations. FATF is the most popular monitoring body, which is well-known for outlining the general guidance for cryptocurrencies.