The European institutions reached an interim agreement on a set EU regulations that will impose financial penalties on crypto companies. These regulations will include the obligation to prevent money laundering and other illegal activities that could involve digital assets. As the Union strives to regulate the entire continent’s cryptocurrency market, this is a significant step forward.
The key players in the EU’s decision making process reached an agreement on anti money laundering rules. This will require crypto businesses to verify their customers’ identities and report suspicious transactions. The future will include cryptocurrency transactions in Europe’s Transfer of Funds Regulation.
Although the regulations have yet to be finalized by the relevant European institutions, the provisional agreement signals a tightening of the sector. The European Parliament and EU Council announced Wednesday that crypto firms will be required to support financial authorities in their efforts to crackdown on dirty money.
Reuters reported that the improved oversight will allow crypto assets to be tracked just like money transfers. This is based on a previously released official statement. The news agency quoted Ernest Urtasun from the Spanish Green Party, who participated in the process.
These new rules will allow law enforcement officers to link certain transfers with criminal activities and to identify the person responsible.
EU bodies also noted that the rules will also apply to ‘unhosted crypto wallets. This term is used by European officials for wallets owned by private individuals and not licensed platforms. This will apply to transactions with crypto service provider exceeding EUR1,000 in fiat (around $1,040).
The crypto industry has not responded enthusiastically to the proposals. Businesses that deal with crypto assets sent a mid-April letter to the 27 EU finance ministers. It urged them to follow the standards set by FATF (the global Financial Action Task Force on Money Laundering).
The EU will also seek agreement on Thursday to establish a broad framework for regulating crypto-related activities throughout the Union. Representatives of EU countries and members of the European Parliament need to agree on their positions regarding the new Markets in Crypto Assets ( MICA) legislative proposition. This legislation is expected to enter into effect before the end next year. After that, crypto companies will have an additional 18-month period to apply for a MiCA license in order to be able to operate within the European Union.
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