News

EU Takes A New Step In Crypto Regulation

Crypto is being The EU, the Parliament, the Council, and the European Commission reached an interim agreement on 29 June on the Money Transfer Regulation (TOFR). The TOFR is part of the legal framework the EU is establishing for crypto regulation.

Following implementation, cryptocurrency service providers (CASP) in the European Union must comply with the rules and adapt their internal policies and procedures accordingly.

The rules will take effect 18 months after the MiCA regulations are applied.

Wild West Regulation of Cryptocurrencies

TOFR introduces some anti-money laundering rules to collect data on cryptocurrency transactions.

In a series of tweets about the interim deal, Ernest Utasun, an EU legislator, saw the deal as the answer to an “unregulated crypto wild west.”

According to him, the TOFR rules apply to every transaction, even if it is worth no more than 1 Euro, including transactions made at cryptocurrency ATMs. In addition, the CASP will have to collect data on non-archive wallet transactions, including transactions made and received from the wallet.

The rule also requires that the identity of the holder of a non-storage wallet be verified when making transactions over €1000 (equivalent to the US $1,045). The rules about non-archive wallets seem to be dictated by the thought that the wrongdoer mainly uses them to commit criminal acts.

Another topic of controversy that forced regulation was Russia’s taking advantage of cryptocurrencies to avoid financial sanctions. Under this rule, CASPs are subject to economic sanctions imposed by the EU.

However, the rules do not apply to peer-to-peer (P2P) transactions. If users do not like to implement TOFR rules on data collection, they can switch to P2P transactions.

The rules will also govern the relationship of digital asset providers to CASPs in developing countries, mainly where these providers are unregulated and unlicensed.

Speaking about the rules, E.U. policymaker Ondřej Kovařík tweeted:

“The EU institutions have reached an interim political agreement on the Money Transfer Regulation. I believe it strikes the right balance in minimizing the risk of money laundering in the cryptocurrency sector without preventing the innovation and overload of businesses. ”

The cryptocurrency provider will protect the data collected on transactions and make it available to the EU.

Concerns about TOFR rules

The European Union has recently stepped up its efforts to implement regulatory frameworks for cryptocurrency operations. Several organizational crises recorded in the cryptocurrency market since 2022 have further increased this demand.

However, experts and analysts see regulatory efforts as a move to limit crypto use in the European Union. At the same time, TOFR rules are highly likely to violate citizens’ privacy.

Instead of supporting the development of cryptocurrencies, many believe that the regulations will delay blockchain development in the EU and hold back innovation. Another potential negative impact of requiring data collection on all trades could unnecessarily slow down and cost the broker’s operations.

Likewise, the security of the data collected is also threatened. Specifically, transferring data between the CASP and the government can make them vulnerable to attacks.

The European Agency, the European Commission, and the European Banking Authority are some of the EU institutions that have been attacked.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

KAI

CoinCu News

Victor

Recent Posts

Gate.io Launches USDE Financial Products with Annualized Returns of Up to 54%, Ushering in a High-Return Era for Stablecoin Investments

Nov 18th, Panama - Gate.io, a global leader in digital asset trading, has officially unveiled…

19 minutes ago

Bitdeer Convertible Notes Worth $360 Million Offered for Expansion Efforts

The Bitdeer convertible notes offer a 42.5% conversion premium, allowing conversion into cash with the…

48 minutes ago

Sui Foundation Enters into Strategic Partnership with Franklin Templeton Digital Assets

Grand Cayman, Cayman Islands, 22nd November 2024, Chainwire

1 hour ago

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

3 hours ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

4 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

4 hours ago

This website uses cookies.