The Defiant

EU Regulators Propose Crypto Clampdown

European Defiers better buckle up, because regulators in the EU are attempting to tighten the rules on crypto transfers.  On July 20, the European Commission, the executive branch of the European Union, announced a package of legislative proposals to strengthen the EU’s anti-money laundering and counterterrorism financing (AML/CFT) rules. The legislative proposal moves to apply…

By: Dan Kahan Loading...

EU Regulators Propose Crypto Clampdown

European Defiers better buckle up, because regulators in the EU are attempting to tighten the rules on crypto transfers.

On July 20, the European Commission, the executive branch of the European Union, announced a package of legislative proposals to strengthen the EU’s anti-money laundering and counterterrorism financing (AML/CFT) rules. The legislative proposal moves to apply all of the EU’s AML/CFT rules to the crypto sector. This will require all crypto service providers operating in the EU to adhere to Know Your Customer (KYC) policies and be able to fully trace crypto-asset transfers to detect possible money-laundering or terrorism financing.

Currently, these AML/CFT rules only apply to certain categories of crypto-asset providers.

“Our laws hav[e] to keep up with time and technological development,” said Valdis Dombrovskis, the European Commission’s Executive Vice President, in a press conference. “In the case of crypto-assets, this has become urgent. Crypto-assets are increasingly used for money laundering and other criminal purposes.”

No Anonymity?

The proposal also aims to prohibit anonymous crypto wallets. In a statement to Cryptonews.com on July 21, a spokesperson at the European Commission clarified that these rules will only apply to accounts provided by Virtual Asset Service Providers (VASPs) and not to private, non-custodial wallets held by individual users.

These proposals arrive amidst increased scrutiny of the crypto space by governmental regulatory bodies. In May, China banned financial institutions and payment companies from engaging in crypto transactions. In June, the Financial Conduct Authority (FCA), a financial regulator in the UK, issued a consumer warning about Binance and crypto-investing in general. The U.S. treasury is also eyeing changes to cryptocurrency reporting guidelines in order to crack down on tax evasion.

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