EU Proposes Law to ‘Ensure Full Traceability’ of Crypto Transfers, Ban Anonymous Wallets

The European Commission has proposed laws to “ensure whole traceability of crypto-asset transfers, this sort of as bitcoin,” in get to prevent and detect “their feasible use for cash laundering or terrorism funding.” Additionally, “anonymous crypto asset wallets will be prohibited.”

New EU Principles Ban Nameless Crypto Transactions and Wallets

The European Commission presented a set of legislative proposals Tuesday aimed at strengthening the EU’s anti-cash laundering and countering terrorism funding (AML/CFT) rules. Amongst the proposals is a revision of the 2015 Regulation on Transfers of Cash “to trace transfers of crypto-property.”

The proposals acquire into account “new and rising worries connected to technological innovation,” together with “virtual currencies, more built-in financial flows in the Single Marketplace and the global character of terrorist organisations,” the Commission discussed.

At the heart of the proposed legislative bundle is the creation of a new “EU-level Anti-Cash Laundering Authority (AMLA).” It will be “the central authority coordinating nationwide authorities to assure the private sector accurately and continuously applies EU policies.”

The proposals also include “full application of the EU AML/CFT principles to the crypto sector.” The commission stated that at present only particular classes of crypto assistance vendors are included in the scope of the EU AML/CFT policies. The proposals extend the policies to the overall sector, “obliging all assistance suppliers to conduct thanks diligence on their consumers.” The European Commission explained:

Today’s amendments will make certain full traceability of crypto-asset transfers, these as bitcoin, and will make it possible for for prevention and detection of their achievable use for funds laundering or terrorism financing.

The announcement adds that in applying comprehensive EU AML/CFT procedures to the crypto sector.:

Anonymous crypto asset wallets will be prohibited.

The Commission mentioned that “anonymous bank accounts are now prohibited by EU AML/CFT principles.”

The legislative offer will now be mentioned by the European Parliament and Council. “The future AML Authority ought to be operational in 2024 and will start its get the job done of immediate supervision marginally afterwards, as soon as the Directive has been transposed and the new regulatory framework begins to apply,” the European Fee concluded.

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