On
Thursday, MEPs from the Committee on Economic and Monetary Affairs
(ECON) and the Committee on Civil Liberties (LIBE) adopted, with 93
votes to 14 and 14 abstentions, their position on draft legislation
strengthening EU rules against money laundering and terrorist financing.
Traceability of transfers of crypto-assets
Under the new requirements agreed by
MEPs, all transfers of crypto-assets will have to include information on
the source of the asset and its beneficiary, information that is to be
made available to the competent authorities. The rules would also cover
transactions from so-called unhosted wallets (a crypto-asset wallet
address that is in the custody of a private user). Technological
solutions should ensure that these asset transfers can be individually
identified.
The aim is to ensure that crypto
transfers can be traced and suspicious transactions blocked. The rules
would not apply to person-to-person transfers conducted without a
provider, such as bitcoins trading platforms, or among providers acting
on their own behalf.
No minimum thresholds
Due to their speed and virtual nature,
crypto-asset transactions easily circumvent existing rules based on
transaction thresholds. MEPs decided therefore to remove minimum
thresholds and exemptions for low-value transfers.
Public register of high-risk entities
MEPs want the European Banking Authority
(EBA) to create a public register of businesses and services involved
in crypto-assets that may have a high risk of money-laundering,
terrorist financing and other criminal activities, including a
non-exhaustive list of non-compliant providers.
Before making the crypto-assets
available to beneficiaries, providers would have to verify that the
source of the asset is not subject to restrictive measures and that
there are no risks of money laundering or terrorism financing.
Quotes
Ernest Urtasun (Greens/EFA, ES), co-rapporteur
for ECON said: “Illicit flows in crypto-assets move largely undetected
across Europe and the world, which makes them an ideal instrument for
ensuring anonymity. As illustrated by all the recent money-laundering
scandals, from the Panama Papers to the Pandora Papers, criminals thrive
where rules allowing for confidentiality allow for secrecy and
anonymity. With this proposal for a regulation, the EU will close this
loophole.”
Co-rapporteur for LIBE Assita Kanko
(ECR, BE) said: “Our report has two goals: to protect and to normalise.
We should be facilitating the use of crypto-assets by people of good
will safely and correctly, as well as protecting against the use of
crypto-assets for terrorist financing, extortion, child sexual abuse
material or money laundering. But we also seek to normalise the crypto
world as it grows, implementing rules that create trust. More than a
decade after the creation of Bitcoin, it is high time we took these
important steps for our citizens.”
Next steps
The adopted text represents the draft
mandate for MEPs to negotiate the final shape of the legislation with EU
governments. The EP as a whole should vote on it during the plenary
session in April.
Background
The new rules are part of a new Anti-money laundering package,
which sets out measures to strengthen the EU rules on combating money
laundering and terrorist financing. It addresses the shortcomings of the
existing framework, which include ineffective implementation, weak
oversight and insufficient detection of suspicious transactions.
Currently there are no rules in the EU
allowing crypto-asset transfers to be traced and providing information
on the originator/beneficiary of such crypto-asset transfers.