EU tightens rules on crypto transactions – no more “Wild West”.

The EU parliament on Thursday voted for stricter rules against money laundering involving cryptocurrencies such as Bitcoin.

With the new law, Europe is ending “the wild west of the blockchain world,” explains German politician Stefan Berger (CDU), rapporteur for the European Parliament. There are currently about 10,000 different crypto assets, he stressed.

What changes?

In Strasbourg, MEPs voted overwhelmingly in favor of the first EU law on crypto transfers. Like other financial transactions, these must always be traceable and suspicious transactions must be blocked. In addition, the EU markets for cryptocurrencies will have a unified legal framework in the future.

The so-called MiCA regulations The EU (short for Markets in Crypto Assets) requires issuers of crypto assets such as Bitcoin to provide clients with detailed information and prohibits insider trading and market abuse. In addition, the providers can be held liable under certain conditions in the event of major losses.

When it comes to anti-money laundering measures, the EU focuses on where Bitcoin, Ether and other digital currencies are exchanged for conventional money such as euros or US dollars. Therefore, direct transfers between holders of cross-platform crypto wallets are omitted. But they would be hard to control anyway.

There is also a special regulation when crypto platforms such as Coinbase, Crypto.com or Binance process transactions with such independent wallets: Here the information obligation applies for amounts of 1000 euros or more.

Why is the EU tightening up legislation?

“The previous lack of regulation for crypto assets has led to huge losses for many new investors and has provided a safe haven for scammers and international criminal networks for more than a decade,” said German MP Rasmus Andresen.

Spanish Greens MP Ernest Urtasun said investors betting on virtual money have often suffered huge losses for more than a decade.

EU Finance Commissioner Mairead McGuinness was convinced during a debate in Strasbourg on Wednesday that the new rules would have prevented bankruptcies such as that of the crypto exchange FTX in November.

When does this take effect?

The regulation still requires the approval of EU member states, which is considered a formality. The rules could then come into force gradually from July 2024.

Sources

(dsc)