Money Laundering and Terrorism Financing (ML/FT) pose a serious threat to the integrity of the economy and financial system of the European Union (“EU”) and the security of its citizens. Thus, in the latest efforts to tighten the regulations on ML/FT, the European Commission proposed that entities whose activities include the transfer of bitcoin or similar crypto currencies shall collect the details of the sender and the receiver in order to aid authorities in cracking down on illicit money and help the fight against ML/FT.
This proposal was put forward through a suggested law which, if enacted would apply what is known as the travel rule to crypto transactions in order to make these transactions as traceable as possible. It must be denoted that such rule already applies to wire transfers, which is one of the recommendations put forward by the Financial Action Task Force (“FATF”).
Therefore, every company dealing with crypto-assets for its clients must include the following:
- Name of the client;
- Residential address;
- Date of birth;
- Account number; and
- The name of the person who will receive the crypto-assets.
Furthermore, the service provider of the receiver shall also verify the above information and make sure that there is nothing missing.
It is imperative to mention that, identically to the procedure within anonymous bank accounts, providing anonymous crypto-asset wallets will also be prohibited under EU anti-money laundering rules. Nonetheless, such rules must be implemented by the EU Member States in order for them to become enforceable as law.
