EU Wants To Tighten Rules Around Crypto Exchanges

The European Commission (EC), which is the executive branch of the European Union (EU), confirmed a new proposal today, calling for stricter regulation of anonymous cryptocurrency wallets and transactions.

Earlier in July, leak reports suggested that the Commission would be moving forward with a harsher crackdown. Today's announcement confirms it.

EU to Propose New Anti-Money Laundering Body to Crack Down on Crypto: Report

The European Union is discussing set up a new agency to crack down on money laundering and introduce transparency rules for cryptocurrency, according to Reuters. A new proposal from the European Commission wants crypto service providers—such as exchanges—to collect and make accessible the data of those making transactions, Reuters news agency reported today, citing documents it had seen.  Currently, transfers of digital assets are not included in EU rules for financial services, the report stat...

Per the document, the Commission has proposed to oblige companies that facilitate transfers of Bitcoin and other cryptos to collect various personal data of senders and recipients. In theory, this should help law enforcement agencies to combat money laundering.

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” said the Commission in its press release. “In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector.”

Essentially, the Commission proposed to expand the so-called “travel rule” to crypto transactions as well, making them more traceable. The rule itself is already being applied to wire transfers in the EU and is part of the Financial Action Task Force’s recommendations.

According to the Commission’s proposal, companies that process crypto transactions will have to record their customers’ names, addresses, dates of birth, accounts numbers, and names of the recipients. Naturally, crypto enthusiasts won’t be able to fill in their anonymous crypto addresses for such transfers. 

Meanwhile, anonymous bank accounts are already banned in the EU to help quell money laundering.

“These proposals have been designed to find the right balance between addressing these threats and complying with international standards while not creating an excessive regulatory burden on the industry,” the document explained.

“On the contrary, these proposals will help the EU crypto-asset industry develop, as it will benefit from an updated, harmonized legal framework across the EU,” the Commission concluded.