- The proposal would ban wallets from 'anonymous crypto assets.
- Banks will also be required to provide names, date of birth, account number and address customers when they facilitate transactions.
Crypto has long been associated to tax evasion, money laundering and terrorist financing, which was a major setback for its acceptance into themost countries. In recent months, the UK , Japan, the United States and other international financial regulators have sought to get ahead of cryptoassets to control their use amid rising adoption among young adults.
As part of the plans, the Commission of the European Union has decided to impose a legal framework for guide the operation of crypto and control its use by ensuring that the transfer of virtual assets becomes more traceable.
According to the European Commission , companies that manage virtual assets will beare obliged to enforce anti-money laundering rules as well as transparency requirements for the transfer of crypto assets. The proposal, which is expected to be implemented as law in two years, would see a ban on anonymous crypto asset wallets. Additionally, businesses such as banks would be required to provide names, dates of birth, account numbers and addresses of customers when facilitating transactions.
Transfer of crypto-assets to comply with anti-money laundering laws
According to Commission, the transfer of crypto-assets would be subject to the same requirements as a bank transfer.
The Commission further explained that although some crypto-related companies are already subject to anti- money laundering, the new law coversra the entire crypto industry. All crypto related service providers are encouraged to exercise due diligence with their customers. The proposal will need to be approved by Member States and the European Parliament before it becomes law.
The author of "The 50ft Blockchain Attack" David Gerard defended the Commission saying she was just applying the rules. According to him, the best way to earn real money is by following the rules of "real" money.
Apart from highly volatile assets, regulators around the world have also proposed a legal framework to guide the use of stablecoins. Recently, the US Secretary of the Treasury Janet Yellen called on regulators to submit these assets lesss volatile to regulation. Although it has been established that stablecoins can be useful for payment, users and financial institutions should be protected.