Members of the European Parliament from the Committee on Economic and Monetary Affairs and Civil Liberties adopted on Thursday with 93 votes in favor, 14 against and 14 abstentions a position on the draft law aimed at strengthening EU rules against money laundering and terrorist financing.
Traceability of crypto asset transfers
Under new requirements approved by lawmakers, all crypto-asset transfers will have to be accompanied by information about sources and recipients. This information should be available at the request of the competent authorities. The rules would also cover transactions made from so-called hostless wallets (a crypto asset wallet address owned by a private user). Technological solutions should ensure that crypto-asset transfers can be individually identified.
The goal is to ensure the traceability of crypto asset transfers and block suspicious transactions. The rules should not apply to person-to-person transfers of crypto assets without a provider, such as bitcoin exchanges, or between providers acting on their own behalf.
There is 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 remove minimum thresholds and exemptions for transfers of low-value crypto assets.
Public register of risk subjects
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 activities, including an endless list of non-compliant providers.
Before making crypto-assets available to users, 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.
Quotes
Ernest Urtasun (Greens/EFA, ES), co-rapporteur of the Committee on Economic and Monetary Affairs, said: “Illicit flows of crypto-assets remain largely unnoticed across the EU and the world, making them ideal instruments for ensuring anonymity. As in the past, money laundering scandals ranging from the Panama Papers to the Pandora Papers have shown that criminals thrive where anonymity is guaranteed due to confidentiality rules. This EU legislative proposal will fill this gap.”
Assita Kanko (ECR, BE), co-rapporteur of the Committee on Civil Liberties, underlined: “Our report reflects two goals: to protect and to normalize. All people of good will should be encouraged to use crypto-assets correctly and safely, just as they should be protected from the use of crypto-assets for terrorist financing, extortion, child pornography or money laundering. -assets as they evolve, building rules that build trust. It’s been over a decade since bitcoin began. It’s time to take these important steps for our citizens.”
Next steps
The adopted text represents a draft mandate for MEPs to start negotiations with EU governments on the final form of the law. The EP is expected to vote on this file during the April plenary session.
context
The regulation is part of a new anti-money laundering package that includes measures to strengthen EU rules in the fight against money laundering and terrorist financing. It develops solutions for the shortcomings of the existing framework, which is evidenced by ineffective implementation, incorrect monitoring and insufficient detection of suspicious transactions.
For the time being, there are no rules in the EU that enable the tracking of crypto-asset transfers or provide information about the initiator/beneficiary of such transfers.
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