The European Parliament (EP) has noted, through a new draft legislation, the importance of tracing and identifying crypto-asset transfers in order to prevent their misuse for committing ML/TF and other financial crimes. This draft legislation, which seeks to enable the tracing of crypto-assets just like conventional money transactions, comes under the new European Union (EU) AML package.
The legislation will require crypto-asset service providers to record information about the source of the assets under transaction as well as their beneficiaries. The ability to trace crypto-asset transfers will allow the authorities to block suspicious transactions. However, these rules would not apply to person-to-person transfers that take place in the absence of a provider or between two providers. The legislation further stipulates that there will no longer be any minimum thresholds and exemptions for low-value crypto-asset transfers.
EU legislators have also decided that the European Banking Authority (EBA) should create a public register of crypto-asset-related businesses and services with a high ML/TF risk. Moreover, crypto-asset service providers would have to verify that there are no restrictions or ML/TF risks related to the source of the asset before allowing access to beneficiaries.
The EP would vote on the final draft of the legislation in April 2022.
Source: European Parliament