New proposal from EU for crypto money laundering

laundering crypto

There appears to be agreement on a new regulation to be approved to boost anti-money laundering activities in crypto.

European Union proposes new directives for crypto money laundering

While waiting for the entry into force of the MiCA regulation, approved in March by the European Parliament, which is expected to give the first real regulation of the crypto market in the EU, some corrections or additions are already being considered, especially to prevent risks of criminal uses of them.

The European Parliament, in consultation with the Council, has reportedly reached tentative agreement on a new bill to ensure that cryptocurrency transfers can always be tracked and suspicious transactions blocked. 

This particular topic would fill a gap in the MiCA directive, which was due to go into effect at the end of June.

A press release from the European Parliament reads:

“The agreement extends the so-called ‘travel rule’, already existing in traditional finance, to cover transfers in crypto assets. This rule requires that information on the source of the asset and its beneficiary travels with the transaction and is stored on both sides of the transfer. Crypto-assets service providers (CASPs) will be obliged to provide this information to competent authorities if an investigation is conducted into money laundering and terrorist financing”.

European legislation aimed at combating money laundering in crypto

The regulation should also cover so-called unhosted wallets, that is, those outside traditional centralized exchanges or brokers. However, the same rule a few days ago was rejected by UK authorities, which excluded these wallets from tracking crypto transactions.

The new measure, called the “funds transfer regulation”, seeks to enforce wire transfer requirements for cryptocurrency transfers by requiring CASPs to collect and send customer data with said transactions.

Ondrej Kovarik, one of the proponents of the legislative measure, wanted to comment on Twitter on reaching this agreement, he said:

“Strikes the right balance in mitigating risks for fighting money laundering in the crypto sector”.

In contrast, Ernest Urtasun, co-author of the bill, said:

“This new regulation strengthens the European framework to fight money-laundering, reduces the risks of fraud and makes crypto-asset transactions more secure. This regulation introduces one of the most ambitious travel rules for transfers of crypto assets in the world. We hope other jurisdictions will follow the ambitious and rigorous approach the co-legislators agreed today”.

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