You are using an older browser version. Please use a supported version for the best MSN experience.

European Union lawmakers are tightening rules on cryptocurrency transfers

The Indian Express logo The Indian Express 01-04-2022 Tech Desk
© Provided by The Indian Express

European Union (EU) lawmakers are tightening rules on cryptocurrency transfer, in the view of rising use of crypto-assets for money laundering. According to Reuters, the new proposal will make it mandatory for cryptocurrency companies such as exchanges operating across EU to obtain, hold, and submit information on any of their users involved in any transfers.

The proposals aims to extend anti-money laundering requirement (AML), a rule already applicable in the conventional payment space. This would make it necessary for crypto exchanges to report to the authorities if any transaction above EUR 1,000 ($1100) takes place.

Read more |Everyday Technology: What are NFTs? How are they different from cryptocurrency?

Under the new draft rules, users receiving cryptocurrency of even the smallest amount would need to be identified, including for transactions with unhosted or self-hosted cryptocurrency wallets. As per EU commission, this will help authorities crack down on laundered money.

Reuters reports that cryptocurrency exchanges handling  any crypto-assets for a customer must include the customer's name, address, date of birth and account number, and the name of the person who will receive the crypto-assets. The recipient's service provider must also check if any of the required information is missing.

Further, the new guidelines will prohibit using any anonymous wallet for crypto transaction. A crypto wallet is where your cryptocurrency such as Bitcoin, Ether, etc lies. Users can create account on both KYC complied and anonymous crypto-wallets. However, as per EU anti- money laundering rules, to facilitate any transaction, users will have to use a KYC crypto wallet.

"That would make is easier to identify and report suspicious transactions, freeze digital assets, and discourage high-risk transactions, "said Ernest Urtasun, a Spanish Green Party lawmaker, as quoted by Reuters. Urtasun is helping to steer the measure through the parliament.

Read more |Soccer-Messi signs $20 million deal to promote crypto fan token firm Socios

The development came in spite of objections from Coinbase, one of EU's largest crypto company.

"Imagine if the EU required your bank to report you to the authorities every time you paid your rent merely because the transaction was over 1,000 euros," Coinbase CEO Brian Armstrong said in a tweet. "Or if you sent money to your cousin to help with groceries, the EU required your bank to collect and verify private information about your cousin before allowing you to send the funds. How could the bank even comply? The banks would push back. That’s what we are doing now."

Armstrong firmly believes that the new policy "disproportionately punishes crypto holders and erodes their individual rights in deeply concerning ways. It's bad policy," he added in the same Twitter thread.

More from The Indian Express

The Indian Express
The Indian Express
image beaconimage beaconimage beacon