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EU deputies, as part of the rules for identifying cryptocurrency owners, propose creating a list of crypto companies potentially at risk of money laundering and terrorist financing.
Members of the European Parliament have posted a document with new rules, according to which the European Banking Authority (EBA) will have to create a register of cryptocurrency companies at risk of money laundering, terrorist financing and other criminal activities.
“Members of the European Parliament want [EBA] created a public registry of businesses and services related to crypto assets that may have a high risk of money laundering, terrorist financing and other criminal activities, including a list of suppliers that do not meet the requirements,” the document says.
The rules are part of the latest EU vote that cryptocurrency exchanges are required to collect and share information about users of their own wallets trading on the platform, as part of the Know Your Customer (KYC) requirement.
“Before making crypto assets available to beneficiaries, providers must ensure that the source of the asset is not subject to restrictive measures and that there are no risks of money laundering or terrorist financing,” the deputies explain.
Ernest Urtasun, monetary adviser to the EU Committee, argues that the change will close a loophole that criminals use to carry out illegal activities.
“Illicit flows of crypto assets move around Europe and the world almost unnoticed. As recent money laundering incidents from the Panama Papers to the Pandora Papers show, criminals thrive where the rules allow for secrecy and anonymity. The EU regulation proposal will close this loophole,” Urtasun said.
According to Coinbase CEO Brian Armstrong, the new changes overturn existing EU privacy standards, setting the stage for mass surveillance. He believes this undoes all the EU’s work to become the world leader in privacy law and policy.
“The parliamentary bill treats cryptocurrencies and every person who owns cryptocurrencies differently than fiat holders,” Armstrong said.
The European Union is increasingly tightening the rules for regulating cryptocurrencies. Last week, European Parliament committees called for a ban on the anonymity of cryptocurrency transactions. In April, the EU Parliament is due to vote on tough new rules for tracking and identifying transactions for the transfer of crypto assets.
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