MEPs support bill to ban anonymous crypto transactions

Members of the European Parliament have approved a bill to tighten crypto rules, which should, among other things, ban anonymous transactions. EU member states have yet to agree. The entire Parliament will consider the proposal in April.

The bill has been approved by two committees of the European Parliament, by 93 votes to 14. According to members of the Parliament, the bill is intended, among other things, to be able to track transactions with cryptocurrencies, in order to combat issues such as fraud and money laundering.

As part of the proposal, information about ‘the source’ and recipient of the cryptocurrency must be available with every crypto transaction. That information should be made available to competent authorities upon request. That would mean crypto exchanges would need to collect, store, and provide information to authorities on demand from their customers. That should make it easier to identify suspicious transactions and freeze digital assets, says Spanish MEP Ernest Urtasun.

The law would also apply to transactions from ‘unhosted wallets’, which are in the control of private users. The European Parliament does not say specifically how this should be enforced, but states that ‘technological solutions’ should ensure that cryptocurrencies transfers can be individually identified. The proposal submitted by the European Commission last year mainly applied to anonymous crypto wallets at financial service providers, such as exchanges.

There are currently no conditions at all from the EU to track crypto transactions. The European Commission previously proposed to apply new rules to transactions from 1000 euros, also writes Reuters, but the European Parliament has voted to remove that minimum threshold from the proposal. The rules would therefore also apply to small transactions, if those rules actually come into effect.

The members of the European Parliament also want the European banking authority EBA to establish a public register. That register must include companies and services that are involved in crypto trading and that run a ‘high risk’ of money laundering and the financing of terrorism and other criminal activities, according to the European Parliament. Companies that do not comply with the rules must also be included in that register.

For now, this is only a bill. Members of the European Parliament are still negotiating the content with the EU Member States. According to Reuters, EU member states already agree that there should be no minimum thresholds for any tracking rules. A further plenary session will be held in April, during which the entire European Parliament will consider the proposal.