On Thursday, members of the Committee on Economic and Monetary Affairs and the Committee on Civil Liberties adopted their positions by 93 votes in favour, 14 against and 14 abstentions on the draft law to strengthen EU rules against money laundering and terrorist financing.
Traceability of crypto asset transfers
Under new requirements approved by MPs, all transfers of crypto assets must be accompanied by information about sources and recipients. This information should be made available at the request of the competent authorities. The rules would also cover transactions made with so-called non-hosted wallets (a wallet address for crypto assets owned by a private user). Technological solutions should ensure that crypto asset transfers can be individually identified.
The aim is to ensure the traceability of crypto asset transfers and block suspicious transactions. The rules should not apply to in-person transfers of crypto assets made without a provider, such as bitcoin exchanges, or between providers trading on their own behalf.
No minimum threshold
Due to their speed and virtual nature, crypto asset transactions can easily circumvent existing rules based on transaction thresholds. MEPs decided to abolish the minimum thresholds and exemptions for transfers of low-value crypto assets.
Public Register of High Risk Entities
MEPs want the European Banking Authority (EBA) to create a public register of crypto asset entities and services at high risk of money laundering, terrorist financing and other criminal activity, including a non-exhaustive list of non-compliant providers.
Before making crypto assets available to beneficiaries, providers should verify that the source from which they originate is not subject to restrictive measures or that there is no risk of money laundering or terrorism.
Ernest Urtasun (Verts/ALE, ES), co-rapporteur from the Committee on Economic and Monetary Affairs, said: “Illegal flows of crypto assets remain largely undetected in the EU and the world, making them ideal tools to ensure anonymity. Money laundering scandals, ranging from the Panama Papers to the Pandora Papers have shown that criminals proliferate where anonymity is guaranteed by confidentiality rules. With this legislative proposal, the EU will fill this gap.”
Assita Kanko (ECR, BE), co-rapporteur from the Committee on Civil Liberties, underlined: “Our report reflects two objectives: to protect and normalize. All people of goodwill should be encouraged to use crypto assets correctly and securely, just like they should be protected from using crypto-assets for terrorist financing, extortion, child pornography or money laundering.assets as it evolves, establish rules that inspire confidence.It’s been more than a decade since bitcoin’s inception. It’s time we take these important steps for our citizens.”
The adopted text is the draft mandate for MEPs to start negotiations with EU governments on the final form of the legislation. The EP is expected to vote on this file at the April plenary session.
The regulation is part of the new anti-money laundering package that includes measures to strengthen EU rules in the fight against money laundering and terrorist financing. It develops solutions to the shortcomings of the existing framework, reflecting ineffective implementation, poor monitoring and insufficient detection of suspicious transactions.
For the time being, there are no rules in the EU that allow tracing crypto asset transfers or provide information about the originator/beneficiary of such transfers.