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EU seeks to prohibit anonymous crypto wallets in new AML regulations


finbold.com 20 July 2021 15:06, UTC
Reading time: ~2 m

The European Commission has announced a set of proposals that seek to extend anti-money laundering regulations to govern cryptocurrency transactions.

In a statement, the commission indicated that the new guidelines are part of legislative proposals that would require crypto-asset service providers to collect additional AML information for crypto transfers.

The proposal requires companies handling cryptocurrencies to capture customers’ details including name, address, date of birth and account number, and the name of the person who will receive the digital assets.

“At present, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules. The proposed reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers, the commission said.

According to the commission, the proposals are part of dealing with new and emerging challenges related to technological innovation. 

The commission adds that the new laws will put focus on the prevention and detection of cryptocurrencies. Interestingly, the proposal also intends to prohibit anonymous crypto wallets. According to the commission: 

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing. In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector.”

The EU also seeks to boost the supervision of financial transactions by prohibiting cash transactions higher than €10,000. Additionally, the commission recommends creating an authority, the Financial Action Task Force (FATF). 

Proposals awaiting EU parliament’s approvals

With the proposals, the European Parliament will now have the mandate to determine if they go into law. Therefore, the proposals might take at least two years before they become law.  

Recently, the commission, alongside the European Central Bank, announced plans to explore possible challenges with the digital euro rollout. The partnership will offer a roadmap for issuing a digital euro. 

The two entities noted that the project would be key to the design and technical questions and provide the ECB with the necessary tools for the creation of a digital euro. 

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