Special rules affecting the crypto sector in Europe have been adopted by the Council of the European Union. This document updates the European Union anti-money laundering legislation, to address issues such as the risks associated with virtual currency. The new rules aim to reduce the anonymity of crypto users, and apply transactions to KYC (Know Your Customer) requirements in the crypto sector.
Strengthening this rule is done by the European Union to prevent money laundering and terrorism financing. On the other hand, amendments to the EU Directive 2015/849 by the European Parliament were also adopted at a meeting of the General Affairs Council on Monday (14 May). At this meeting, MPs voted support for bringing crypto currencies under legitimate regulations.
The major change involves the detection of risks associated with the virtual currency, taking steps to reduce the anonymity of all crypto transactions. According to the document:
- Stock exchange service providers and crypto wallet providers, will be required to identify suspicious activities.
- The use of crypto should be monitored through a platform.
- The national financial intelligence unit must have access to information related to the crypto address synchronization with the identity of the owner
The steps in the document do not fully solely address the issue of anonymity alone. However, such measures shall be specified by Member States for a maximum of 18 months, by including the provisions of the directives within the framework of their national laws. Only then will crypto exchange across the EU be required to comply with the more stringent AML (Anti Money Laundering) and Anti-Terrorism Funding guidelines, including introducing customer verification on their platforms.
Some companies have taken a step toward the new rules. Localbitcoin, a Helsinki-based crypto-peer-to-peer exchange site, recently updated its terms of service. They highlight the identification requirements and warn users that in some situations, such as trading above a certain volume limit, or in case of hacking (account recovery and fraudulent investigation), customers will be required to submit identification documents.
Source : https://news.bitcoin.com/eu-adopts-rules-to-reduce-anonymity-for-crypto-users/