Members of the European Parliament recently voted in favor of new legislation to limit anonymous crypto transfers to 1000 euros. In addition, two other bills are expected to be added to tighten controls on wallet users and to supplement upcoming MiCA.
Three new draft bills include the so-called EU single rulebook that guides the use of anonymous instruments like crypto assets and the 6th Anti-Money Laundering Directive to ensure access by authorities to reliable information. The third text deals with establishing a bloc-wide Anti-Money Laundering Authority used in the upcoming Markets-in-Crypto-Assets bill.
Restriction of anonymous crypto transfers
The first adopted text compels crypto asset managers to identify their customers’ identities, assets, and ownership. They must send information about associated money laundering and terrorist financing risks to a central register. Under the draft law, anonymous crypto transfers must be limited to 1000 euros.
The second text argues that each EU member-state must establish a financial intelligence unit to “combat money laundering and terrorist financing.” In the third text, lawmakers voted to establish a new supervisory and investigative money laundering authority to supervise entities with a high residual risk. The Anti Money Laundering Authority must directly “directly” supervise the “riskiest crypto asset service providers” operating in the 27-member EU bloc for the first time, according to MEP Emil Radev.
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New Bills Will Complement Upcoming MiCA Bill
The three newly-adopted texts will likely complement the MiCA bill. MiCA introduces a new legislative framework for cryptocurrency businesses, including a licensing scheme and compulsory disclosures. The bill also incorporates The Transfer Funds Regulation, which brought the Financial Action Task Force’s Travel Rule to crypto in mid-2022.
FATF is a global anti-money laundering watchdog that introduced the Travel Rule for banks to share information on fund movements. It recently called for greater enforcement of the Travel Rule for crypto assets at a plenary session in Paris. Under MiCA, every transaction involving a crypto asset service provider registered in the EU must comply with the Travel Rule, irrespective of the amount transferred. EU member state France already applies this rule.
CASPs must send originator and beneficiary information to the AMLA described in the second adopted text. The type and volume of information depend on the amount transferred and whether the CASP suspects foul play. They must ask a self-custodial wallet user who transfers more than 1000 euros if he is the wallet’s owner.
