news EU legislators will vote to block anonymous cryptocurrency transactions

[MrD]

The European Parliament plans to expand AML procedures to all cryptocurrency transactions, as well as restrict or prohibit transfers in crypto from the EU to places considered a tax haven.

The current FATF recommendations on the regulation of cryptocurrencies and the activities of operators of crypto-currency services oblige companies to identify the recipient of a payment in excess of €1,000. The national governments of the European Union have proposed to abandon the lower limit when extending the rules to crypto assets, since large transactions can be broken down into smaller ones - a practice that known as "smurfing".

Officials propose to verify the identities of participants in transactions and deanonymize all cryptocurrency transactions, regardless of their size. Internal parliamentary documents seen by CoinDesk show a high likelihood that members of the European Parliament’s Economic Affairs Committee will support the amendment and vote to end the anonymity of even small cryptocurrency transactions.

Lawmakers are poised to include in anti-money laundering (AML) regulations the movement of crypto assets between non-hosted cryptocurrency wallets, despite uncertainty over how this procedure can be enforced. 

MPs will also require cryptocurrency service providers to refrain from making or facilitating any transfers that carry the risk of money laundering or crime. It is proposed to limit or prohibit the transfer of cryptocurrencies from the EU to any place that is subject to EU sanctions or is considered a tax haven, for example, offshore in the United States, the Virgin Islands, Turkey, Russia or Hong Kong.

Recall that on March 15, amendments to the law on strengthening measures to prevent money laundering and terrorist financing came into force in Estonia. The update makes the Estonian regulatory regime for digital asset platforms even stricter than the general EU rules.