EU to ban cryptocurrency anonymity
The European Commission as an executive body of the European Union (EU) came up with a set of proposals to suppress money laundering activities by tightening supervision of anonymous cryptocurrency wallets and transfers.
Upcoming EU regulations
ZyCrypto reports that the European Commission has been intending to crack down on the cryptocurrency sector for quite some time. That intention turned into action with the recent publication from the Commission, proposing to obligate firms that deal with cryptocurrency transactions to collect information on their users such as their names, addresses, account data, date of birth and their transaction recipients’ names. The aim of the initiative is to curb money laundering and financial terrorism.
“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” the Commission said in a statement.
It is also known that the regulator’s proposal states anonymous crypto asset wallets will be forbidden across the EU in compliance with AML and CFT rules applying to all cryptocurrencies.
Cryptocurrency service suppliers will be obligated to record both the sender’s and recipient’s names, addresses, date of birth and other account information. The payment processor on the recipient’s end will also have to verify that information.
According to Mairead McGuinness, Financial Services, Financial Stability and Capital Markets Commissioner, crypto assets are one of the newest ways to launder money.
We have to keep in mind that in traditional finance anonymous bank accounts are already prohibited within the territory of the EU for the same reason: anti-money laundering policy.
The European Commission also stated that the rules were “designed to find the right balance between addressing these threats and complying with international standards while not creating an excessive regulatory burden on the industry”.
Rules to boost the industry
According to the European Commission, in practice, their proposals boost the development of the cryptocurrency industry in the EU since everyone only benefits from “an updated, harmonized legal framework”.
“These proposals are to create the right balance between addressing these threats and complying with international standards while not creating excessive regulatory burden on the industry. The amendments will help the digital-asset industry develop with an updated, harmonised legal framework across the EU”, said the Commission.
The European Parliament and EU countries have the final word on the draft bill, which means it might take at least 2 years before it goes into full effect.
One may recall that in June, Financial Action Task Force (on Money Laundering) (FATF) urged to accelerate the implementation of financial measures to combat money laundering since the majority of the countries haven’t met the requirements for cryptocurrency companies, according to the notification following the organisation’s plenary.
Currently, FATF standards are observed in 58 out of 128 jurisdictions. Virtual Asset Service Providers (VASP) are regulated in 52 countries and banned in 6 countries.
New cryptocurrency regulations have been proposed by the European Commission. Aimed to combat money laundering and financial terrorism as well as establish a tighter control over the financial sector, the regulations are likely to be passed within the next few years. The regulators believe their initiative will actually boost the industry.
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