London: The European Union has reached a provisional agreement on transparency of crypto-asset transfers, making it more difficult for criminals to use cryptocurrencies for money laundering.
Negotiators from the Council presidency and the European Parliament reached the pact on the proposal updating the rules on information accompanying the transfers of funds, by extending the scope of those rules to transfers of crypto assets.
The new agreement will enable the EU to deal with the risks of money laundering and terrorist financing linked to these new technologies, while reconciling competitiveness, consumer and investor protection, and the protection of the financial integrity of the internal market, the European Council said in a statement.
"The improved traceability of transfers of crypto assets will also make it more difficult for persons and entities which are subject to restrictive measures to try to circumvent them," it added.
In addition, crypto-asset service providers will have to implement appropriate internal policies, procedures, and controls to mitigate the risks of evasion of national and Union restrictive measures.
The sanctions apply to all natural and legal persons, including those operating in the cryptocurrencies sector.
The introduction of this "travel rule" will ensure financial transparency on exchanges in crypto-assets and will provide the EU with a solid and proportional framework that complies with the most demanding international standards on the exchange of crypto-assets.
"The aim is to introduce an obligation for crypto asset service providers to collect and make accessible certain information about the originator and the beneficiary of the transfers of crypto assets they operate. This is what payment service providers currently do for wire transfers," said the Council.
This will ensure traceability of crypto-asset transfers in order to be able to better identify possible suspicious transactions and block them.
In particular, the new agreement requires that the full set of originator information travel with the crypto-asset transfer, regardless of the amount of crypto assets being transacted.
Regarding data protection, the legislators agreed that the general data protection regulation (GDPR) remains applicable to transfers of funds, and that no separate data protection rules will be set up.
The legislators also agreed on the urgency to ensure traceability of crypto-asset transfers and chose to align the timetable for application of this regulation with that of the markets in crypto assets (MiCA) regulation.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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