The EU Council has adopted a directive affecting the cryptocurrency sector in Europe. This measure updates EU anti-money laundering legislation to address, among other things, risks related to cryptocurrency. The new rules aim to reduce the anonymity of users and digital currency transactions. Cryptocurrency trading platforms will have to implement them. In parallel, a senior official of the European Central Bank (ECB) called for differentiating between crypto activities and traditional financial activities.
Authorities to monitor the cryptocurrency market
The main objective of the changes adopted as part of an action plan launched after the terrorist attacks in Europe in 2016 is to strengthen EU rules to prevent money laundering and terrorist financing. The amendments were adopted at a meeting of the Council of the EU on Monday. This decision follows an agreement reached with the European Parliament in December 2017. In April this year, MEPs voted to support the agreement to control cryptocurrency.
The main changes involve dealing with the risks of virtual currencies. Measures will be taken to reduce the anonymity of crypto investors. According to this document, exchange service providers will be obliged to identify suspicious activities. It states that the authorities should be able to monitor the use of cryptocurrencies through these platforms.
Cryptocurrency definition
The EU Council has made a point of differentiating between cryptocurrencies and electronic currencies. This directive emphasizes that, even if crypto-currencies can be used as a means of payment, they could be used for other purposes and to find broader applications.
A definition of cryptocurrency has been provided. They have been designated as a digital representation of value that is not issued or guaranteed by any government authority or central bank. They are also not considered a legally established currency and have no legal status.
