The European Union has put forward a series of proposals, with which it intends to regulate cryptocurrency transfers (through existing laws) to fight money laundering and terrorist financing. According to the European Commission (EC) statement, the proposed modifications will guarantee the traceability of cryptocurrency transfers.

The critical change in this project is the ban on anonymous cryptocurrency digital wallets and expanding the rules on money laundering for the cryptocurrency sector. With this measure, the aim is to regulate wallets and anonymous cryptocurrency transactions. It is estimated that if this measure is approved, it could be in force as of 2024.

Cryptocurrency providers will need to provide information

According to the proposal, all cryptocurrency providers will have to supply the client’s data or holder of digital currencies: Address, date/place of birth, and the identity document number. Currently, only some providers (of cryptocurrency services) are included in these European Union regulations; however, if this project is approved and implemented, the regulations would apply to the entire cryptocurrency sector within the European Union.

Different standards in the countries of the European Union

The European Union has several years of developing initiatives to eliminate anonymity in using cryptocurrencies. One of the main concerns of the European Commission is the difference between the current laws (against asset laundering, money laundering, and terrorist financing) that exist within the countries that make up the European Union since organized crime can exploit these «legal gaps» between member countries to launder money and support terrorism.

The rules will be proposed to be discussed in the European Parliament and then voted on; in the meantime, regarding financial services, transfers of virtual assets could fall outside the scope of application of European Union law, such as stated in the proposed proposal. According to the European Commission, the absence of transparent and standardized rules leaves cryptocurrency holders exposed to various risks.

In search of balance

The proposals are designed to find the “right balance” to face threats and comply with international standards without creating an “excessive” regulatory burden on the industry. The European Commission notes that the proposals will help develop the crypto assets sector on the continent, as end-users will benefit from an updated legal framework with the entire European Union.

What do you think about this topic? Do you believe it is necessary to prohibit anonymity in cryptocurrency wallets?

If you want more information about buying and selling cryptocurrencies, you can contact us or write your query below (comments section).

Image from chickenonline via under Creative Commons license.

Leave a Reply

Your email address will not be published.