EU committees vote in favor of traceability rules on crypto transfers

EU committees vote in favor of traceability rules on crypto transfers

Two European Parliament committees have reportedly voted in support of legislation forcing cryptocurrency firms to gather and disclose certain transaction data.

The EU committees, namely the Committee on Civil Liberties, Justice, and Home Affairs, as well as the Economic and Monetary Affairs Committee voted to strengthen anti-money laundering regulations in the cryptocurrency world.

In December, European Union ministers had voted on a mandate to work with the European Parliament on a proposition to broaden the scope of financial transfer regulations to include crypto assets.

The plan aims to make it mandatory for crypto service providers, including exchanges, to share and collect data on the sender as well as the beneficiary of asset transfers, similar to how payment systems collect and share data identifying wire transfers.

Legislators sought to enable traceability of transactions between crypto service operators and 'unhosted wallets' so that questionable transaction might be identified and perhaps blocked.

According to a draught study, crypto transfers worth more than 1,000 euros will be subject to checks to ensure that the information on the payment or payee is correct.

The plan, according to Slovenian Fuel Minister Andrej Šircelj, is a vital step toward closing the vulnerabilities in the financial institutions that are maliciously utilized by fraudsters to launder illegitimate gains or finance terrorist actions.

Markus Ferber, the European People's Party (EPP) member who has also served in the European Parliament since 1994, tweeted that is important to take AML threats in crypto seriously, but it should not restrict unhosted wallets. This is the same as prohibiting the use of currency which is both unneeded and unfair.

Paul Tang, a member of the European Parliament, responded to Ferber's tweet by pointing out that rolling out the proposal would not ban anything.

Paul Grewal, chief legal officer of crypto exchange Coinbase, stated that if implemented, this revision will unleash a whole monitoring regime on exchanges such as Coinbase, hinder innovation, and ultimately weaken the self-hosted wallets that people use to effectively secure their digital assets.

Source credit: https://blockworks.co/eu-parliament-committees-vote-to-crack-down-on-crypto-transfers/