Crypto assets and, above all, the many providers of applications for them are also coming under increasing fire in the EU. The EU Commission has now announced that it is planning to “combat money laundering and terrorist financing” to also plan stricter regulations for the crypto sector. In the future, if possible, all transactions of crypto assets should be tracked and assigned to people.
To this end, the EU Commission wants to enforce that all service providers are subject to the duty of care when determining customer identity. In particular, this should mean that anonymous crypto wallets are prohibited and users of the provider services must be identified by ID, for example, in accordance with KYC guidelines. The aim is that “transfers of crypto values such as Bitcoin can be fully traced”, according to the EU Commission.
Track transactions in detail
That would mean that non-financial companies would also find themselves in the position of identifying consumers like a bank and ensuring that their crypto assets and transactions are also documented. It will probably take two years to implement that. In general, there are already existing anti-money laundering rules, but their applicability in the crypto industry is a gray area.
“Money laundering is a clear and real threat to citizens, democratic institutions and the financial system. We must not underestimate the extent of the problem and we must close the loopholes for criminals. With the package presented today, we are stepping up our efforts to stop the laundering of dirty money through the financial system. We are strengthening coordination and cooperation between Member States’ authorities and creating a new anti-money laundering agency, ”said Commissioner Mairead McGuinness, in charge of the financial sector.
New anti-money laundering agency planned
In order to be able to enforce these new rules, the EU wants to set up a new anti-money laundering authority by 2024. Their task is then to ensure that the private sector – and thus also the providers of crypto wallets and exchanges – apply the EU regulations correctly and consistently. “The legislative proposals mentioned are now being discussed in the European Parliament and the Council. The Commission hopes that the legislative process will be swift. The future anti-money laundering authority is likely to be operational in 2024, ”says the EU Commission.
In general, a tightening of the regulations for the crypto industry can also be noticed in the EU. The DAC-8 guideline is also pending. This could force crypto exchanges in the EU to provide data to tax offices so that they can check whether holders of crypto assets have correctly taxed them.