A directive affecting the crypto sector in Europe has been adopted by the EU Council. The document updates the anti-money laundering legislation of the European Union to address, among other issues, “the risks linked to virtual currencies.” The new rules aim to reduce anonymity for both users and transactions with requirements for know-your-customer procedures that crypto platforms will have to implement. Meanwhile, a high-ranking ECB official has called for segregating the crypto business from traditional finances.
Also read: Europe Introduces Customer Verification on Cryptocurrency Exchanges
Authorities to Monitor the Use of Cryptocurrencies
“Strengthening EU rules to prevent money laundering and terrorism financing” has been declared as the main purpose for the changes adopted as part of an “action plan” launched after the terrorist attacks in Europe in 2016. The new directive sets out to “close down criminal finance without hindering the normal functioning of the payment systems,” according to the Council’s press service. The amendments to EU Directive 2015/849 of the European Parliament and the Council of May 20, 2015, were adopted at a meeting of the General Affairs Council on Monday, without discussion. The move follows an agreement with the European Parliament form December 2017. In April this year, MEPs voted to support the deal to “bring cryptocurrencies under closer regulation.”
The main changes involve addressing the “risks linked to virtual currencies” by taking steps to reduce anonymity for both crypto traders and crypto-related transactions. According to the texts, providers of exchange services between virtual and fiat currencies, as well as custodian wallet providers, will be obliged to identify suspicious activities. The directive states that authorities should be able to monitor the use of cryptocurrencies through these platforms, and the national financial intelligence units should have access to information
