BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
The European Union has introduced legislation to identify crypto transfers as part of wider anti-money laundering compliance.
The Members of the Parliament (MEPs) have adopted the draft legislation to strengthen EU laws against financial crimes, such as money laundering and terrorism financing. The MEPs are set to negotiate and finalise legislation with EU governments and Parliament will vote on the matter in its upcoming plenary session in April.
According to MEP Ernest Urtasun, “Criminals thrive where rules allowing for confidentiality allow for secrecy and anonymity. With this proposal for a regulation, the EU will close this loophole.”
Transfers of crypto asset will have to include information on the source and the beneficiary, much like traditional money transfers, under the new rules. This rule applies to transactions from private user digital wallets as well.
Under the new laws, before making a crypto asset available for beneficiaries, the providers, such as crypto exchanges, would have to confirm that the sources of the asset are not subject to restrictive measures and that there are no threats of money laundering or terrorism financing. The new laws will not apply to person-to-person transfers or transfers among exchanges and providers acting on their own behalf.
According to Parliament, “Technological solutions should ensure that these asset transfers can be individually identified.”
The MEPs want the European Banking Authority (EBA) to set up a public register of crypto firms that might have a higher risk of criminal activities, especially money laundering and terrorist financing. They have also decided to remove the minimum threshold and exemption for low-value transfers.