European Parliament Approves New Rules on Crypto Transfers, No Minimum on Tracking Transfers

Last Thursday, Members of European Parliament (MEP) voted to create new rules to track crypto transfers.

The Committee on Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties (LIBE) adopted the legislation, with 93 votes for and 14 against, and 14 abstentions. The draft legislation seeks to strengthen EU rules against money laundering and terrorist financing.

Under the new requirements, all transfers of crypto-assets will have to include information on the source of the asset and its beneficiary, and the information must be made available to the relevant authorities.

The new rules also cover transactions from digital wallets with an address that is in the custody of a private user.

There is no minimum regarding crypto-asset transfers and the need to maintain the information.

According to Parliament, the objective is to ensure all crypto transfers can be traced and blocked if necessary = including peer-to-peer transfers.

The European Banking Authority (EBA) is expected to create a public register of businesses and services involved in crypto-assets that may have a high risk of money-laundering, terrorist financing, and other criminal activities, as well as a list of non-compliant providers.

The new rules are part of a broader Anti-money laundering package, that aims to strengthen rules on combating money laundering and terrorist financing.

The draft mandate will be used to negotiate the final language of the legislation with EU governments with a vote on it during the plenary session later in April.

While FATF, the Financial Action Task Force – a global entity, has recommended requirements to trace crypto transactions under the “Travel Rule” this new European legislation takes it a step further as every single transfer is required to be tracked regardless of the amount of the transfer. The impact, depending on the final language, may be profound.

MEP Assita Kanko said that after more than a decade after the creation of Bitcoin, it is high time we took these important steps for our citizens.

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