- 21st July 2021
- Posted by: Hakeem
- Category: Crypto
- The European Union will step up its efforts to regulate the cryptocurrency industry.
- The bloc cited the reasons behind the move was to limit money laundering activities in the region.
- Anonymous cryptocurrency wallets should be banned, similar to anonymous bank accounts, the proposal stated.
The European Union is tightening its regulations around cryptocurrency transactions to add an additional layer of protection for its citizens. The EU presented a new package to ban anonymous digital asset transactions.
Cryptocurrencies under the spotlight in the EU
The new proposal put forward by the European Union would require cryptocurrency service providers to collect additional anti-money laundering information for digital asset users. According to the bloc, this move will further prevent illicit financial activity within the region.
Crypto service providers will need to collect information of users who wish to transfer digital assets, including the name of the originator of the transfer, the account number, the location of which the account exists and where the transaction is processed.
Supplementary information, including the originator’s address, personal document number, date and place of birth would also be collected through the service provider under the new proposal. Digital asset firms would need to ensure that the required information is included with the transfer.
The proposal applies to all service providers related to cryptocurrencies, and the package targets large transactions only. According to the proposal, the new amendment would ensure full traceability of digital asset transfers, including Bitcoin.
In addition, the package stated that providing anonymous cryptocurrency wallets is prohibited, much like anonymous bank accounts are also outlawed.
Law enforcement authorities will also be provided with access to the new system, which the EU hopes to speed up investigations related to criminal activity in cross-border transactions. The bloc further hopes to strengthen financial stability and security in Europe with the new plan.
While the proposal was presented on July 20, the European Parliament will make the final decision on the package, which could take up to two years until it would become new legislation.