Bitcoin & Co.: EU bodies agree on the end of anonymous crypto payments

The EU wants to make it harder for criminals to misuse cryptocurrencies for criminal purposes. Anyone who uses virtual coins such as Bitcoin, Ethereum or Ripple in the EU should be able to be identified in the future regardless of the equivalent value. Negotiators from the EU Parliament, the Council of Ministers and the Commission in Brussels agreed on such an end for anonymous payments and donations with crypto tokens on Wednesday evening.

A year ago, the EU Commission presented a relevant legislative package to intensify the fight against money laundering and terrorist financing. The initiative aims to ban anonymous crypto wallets and extend due diligence requirements such as identification requirements to the entire sector. The aim is to make the transfer of crypto assets “fully” traceable.

In order to maintain the efficiency of the payment system and keep the underground economy small, the Brussels government institution advocated a de minimis limit of 1,000 euros. However, the negotiators of the EU legislative bodies have now agreed to remove this limit. The leading committees of Parliament had already spoken out in favor of this. Accordingly, all transfers of crypto assets must contain information about their source and recipient. These must be made available to the competent authorities.

Specifically, it is about a reform of the regulation on the transmission of information when transferring money from 2015. The new agreement provides in particular that when transferring crypto assets, regardless of the amount of virtual coins transferred, all information about the client must be transmitted.

According to the agreement, the regulations should also apply to transactions with “unhosted wallets”, which do not require intermediaries such as stock exchanges or crypto value service providers and form the basis for decentralized financial applications. They are kept directly with private users. Special provisions apply to this: if a customer sends or receives more than 1000 euros to or from their own non-hosted wallet, crypto-asset providers must verify that the virtual wallet is actually owned or controlled by the customer.

The rules do not apply to person-to-person transfers made without a provider. This refers, for example, to exchanges via bitcoin trading platforms or between service providers trading on their own behalf. With the inclusion of private wallets, the EU bodies want to make “smurfing” more difficult, whereby criminals split a large transaction into smaller amounts using several apparently unrelated wallet addresses.

For the protection of personal data such as name and address, the negotiators agreed that such information should not be transmitted “if there is no guarantee that privacy will be preserved on the receiving side”. The General Data Protection Regulation (GDPR) still applies to money transfers. Separate data protection regulations should not be introduced. However, the European Data Protection Board is given the task of developing special guidelines for crypto transfers.

The bodies also emphasize that no new sanctions are necessary. The requirements for enforcing the anti-money laundering rules already extend to all natural and legal persons who are active in the field of cryptocurrencies.

In addition, the negotiators agreed that the establishment of a public register for non-compliant and unregulated providers that cannot be traded in the EU should be included in the rules for crypto-assets (Markets in Crypto-Assets, MiCA). becomes. The committees are still deliberating on this. It is also about the energy consumption of Bitcoin.

Proponents of cryptocurrencies were up in arms against the project. The IT association Bitkom complained: Such a copy-paste adoption of conventional money laundering regulations shows that politicians have “still simply not understood the future-oriented crypto business”.

Ernest Urtasun, parliamentary rapporteur for the Greens, counters: “For the first time we will have meaningful regulations for crypto assets in the EU.” The direction away from the Wild West of bitcoin trading “towards a more secure crypto sphere that protects privacy, supports investors and prevents money laundering” is correct. The reform will help enforce “the EU’s targeted financial sanctions against Russian oligarchs.” While blockchain analysis increases transparency, it cannot replace anti-money laundering regulations. Urtasun’s right-wing conservative colleague Assita Kanko spoke of an important step in the fight against child pornography.

After the preliminary agreement, the committees are still working on the technical details of the text. The agreement then has to be approved by the committees responsible, the plenary session of Parliament and the Council before it can enter into force.


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