Preventing terrorists from using cryptocurrencies
Transfers of crypto-assets will be traced and identified to prevent money laundering, terrorist financing, and other crimes, according to new legislation agreed. The EU is making it more difficult for criminals to misuse crypto currencies for criminal purposes.
The European Council presidency and the Parliament have reached a provisional agreement on how to update the rules for transfers of funds by extending the scope of those rules to transfers of crypto assets.
The Commission says 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, in particular recommendations of the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.
“This is especially timely in the current geopolitical context”, the Commission said.
“The aim of this recast 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. This will ensure traceability of crypto-asset transfers in order to be able to better identify possible suspicious transactions and block them.”
Regarding data protection, the co-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 proposal is part of a package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing rules, presented by the Commission on 20 July 2021. The package also includes a proposal to create a new EU authority to fight money laundering.
The Parliament’s o-rapporteur for LIBE Assita Kanko (ECR, BE) said: “For too long, crypto-assets have been under the radar of our law enforcement authorities. Terrorists used crypto for fundraising, to access to child pornography and criminals laundered their proceeds through it. This has really harmed people’s lives and raised doubts about the crypto sector.
Next step is that the agreement must be approved by the Parliament as a whole before it can enter into force.
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