Online message – Friday 04/21/2023
Europe | New rules for tracing crypto asset transfers in the EU (Parliament)
The EU Parliament has approved the first EU rules on tracing crypto asset transfers, preventing money laundering, as well as common rules on supervision and customer protection.
For this it is stated:
-
The text, which the negotiators of the Parliament and the Council had tentatively agreed on in June 2022, aims to ensure that transfers of crypto assets, like any other financial transaction, can always be traced and suspicious transactions can be blocked. The so-called “Travel Rule”, which already exists in traditional finance, will also apply to transfers of crypto assets in the future. This rule requires payment service providers to ensure the transmission of payer and payee details throughout the payment chain.
-
The rules would also cover transactions over €1000 from un-hosted wallets when they interact with hosted wallets managed by crypto service providers. The rules do not apply to person-to-person transfers of crypto assets without a provider, or between providers acting on their own behalf.
-
“Unhosted Wallet” is software or hardware that enables the holding, storage and transfer of crypto assets and is not hosted by a third party such as a financial institution or credit service provider.
Harmonized regulations for crypto assets at EU level
-
The plenary also gave the final green light to new common rules on oversight, consumer protection and environmental protection for crypto assets, including cryptocurrencies (Crypto Asset Markets Regulation, MiCA). Informally agreed with the Council in June 2022, the draft law includes safeguards against market manipulation and financial crime.
-
MiCA will cover crypto assets not covered by existing financial services legislation. The key regulations for issuers and traders of crypto-assets (including value-referenced tokens and e-money tokens) relate to transparency, detection, authorization and monitoring of transactions. Consumers would be better informed about the risks, costs and charges associated with their transactions. In addition, the new legal framework will support market integrity and financial stability by regulating public offerings of crypto assets.
-
Finally, the agreed text contains measures against market manipulation and to prevent money laundering, terrorist financing and other criminal activities. To counter money laundering risks, the European Securities and Markets Authority (ESMA) should set up a public registry for non-compliant crypto service providers operating without a license in the European Union.
-
In order to reduce the high carbon footprint of cryptocurrencies, key service providers will have to disclose their energy consumption.
Next Steps:
The texts now have to be formally approved by the Council before being published in the EU’s Official Journal. They will come into force 20 days later.
Those: EU Parliament, press release from (RD)
Source(s):
NWB NAAAJ-38268