EU lawmakers back new tracing rule for crypto transfers
Reuters
Published Mar 31, 2022 04:10AM ET
Updated Mar 31, 2022 03:36PM ET
By Huw Jones and Tom Wilson
LONDON (Reuters) -European Union lawmakers backed new safeguards for tracing transfers of bitcoin and other cryptocurrencies on Thursday, in the latest sign that regulators are tightening up on the freewheeling sector.
Two committees in the European Parliament jointly voted by 93 in favour and 14 against on cross-party compromises which crypto exchange Coinbase (NASDAQ:COIN) Global Inc warned would usher in a surveillance regime that stifles innovation.
The $2.1 trillion crypto sector is still subject to patchy regulation across the world.
Under the draft law first put forward last year by the EU's executive European Commission, crypto firms such as exchanges would have to obtain, hold, and submit information on those involved in transfers.
That would make is easier to identify and report suspicious transactions, freeze digital assets, and discourage high-risk transactions, said Ernest Urtasun, a Spanish Green Party lawmaker helping to steer the measure through the parliament.
Currently there are no EU requirements for tracing crypto transfers and the Commission had proposed applying the new rule to transfers worth 1,000 euros ($1,116) or more, but lawmakers on Thursday voted to scrap the 'de minimis' threshold, meaning all transfers would be in scope.
Urtasun said removing the threshold brought the draft law into line with rules from the global Financial Action Task Force that sets standards for combating money laundering. Those rules mean crypto firms must collect and share data on transactions.
The lawmakers' committees also backed putting transfers from 'unhosted' crypto wallets held by individuals, not exchanges, under the tracing rule, and on the creation of a list by the EU's European Banking Authority of high-risk or non-compliant cryptoasset service providers.
Coinbase Chief Legal Officer Paul Grewal said in a blog on Monday that traditional cash, not crypto, was by far the most popular way to hide financial crime.
EU states have joint say with parliament on the draft law and representatives from both parties will now meet to agree a final version. Countries have already agreed among themselves there should be no de minimis.
($1 = 0.8961 euros)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.