The European Union (EU) continues to tighten its grip on the crypto-asset industry by making moves to regulate the sector. On June 29, the EU Parliament and Council negotiators struck a deal to allow the tracing of crypto assets.
In the new bill, the EU will have to be able to trace any crypto transactions involving any assets within the bloc. However, keen observers of the EU crypto regulation drive believe the new bill is just an extension of the “travel value” rule.
The “travel value” rule is already implemented in the traditional financial service sector, which gives the body power to race financial dealings. According to the EU, the new guidelines will curb illicit transactions in the crypto industry.
Per the new rule, information about the asset source and the beneficiary will go with the transaction. This will then be stored on both sides of the transfer for reference.
As a result, crypto-asset service providers will be directed to provide the necessary information to regulators in the event of an investigation into money laundering.
The EU is Getting a Grip on Regulations
The EU is turning up the heat on the crypto industry as far as regulation is concerned, as it seeks to stem illegal cryptocurrency transactions. Accordingly, the EU is convinced that crypto-asset transactions are aiding money laundering and that they are bypassing the current threshold.
However, parliamentary negotiators on the new bill will have no exemptions, as previously stated. That is, no minimum threshold in transactions that would not be subject to scrutiny by the body.
Furthermore, the EU is bent on controlling the type of transactions done in the crypto-asset industry as it extends its anti-money laundering drive.
Meanwhile, the EU wants to trace every single transaction in the event of an investigation to ascertain the purpose of such a fund transfer. It appears the new bill is not another new guideline, as reflected in the content where the data of both transaction parties is to be submitted by the crypto exchanges.
Crypto Community Reacts to the New Bill
The EU’s new bill has irked the crypto community regarding the threshold the regulator wants to implement. The U.S.-based crypto exchange, Coinbase, has called the new bill unreasonable to increase digital asset adoption.
According to Coinbase, there is a growing crypto-asset adoption that involves multiple low-value transactions more than ever before. From the privacy point of view, the exchange added that sharing data for low-value transactions is wrong.
However, the EU negotiators disclosed that it is not obligatory to send personal data if there is no guarantee of safety.
According to the EU, before processing transfers to beneficiaries, service providers must ensure that the source of the funds is not found wanting by law. In addition, the service provider should not transfer data if there is no privacy guarantee.
It will be interesting to see how the new bill will make a difference in the EU’s quest to check money laundering.