The European Union Could Ban Crypto Providers From Dealing In Privacy-Enhancing Coins

Under proposed government amendments to anti-money laundering rules, cryptocurrency providers would be prohibited from dealing with cryptocurrencies such as monero or dash.

According to CoinDesk, A leaked draft of a money laundering bill might restrict banks and crypto providers from trading privacy-enhancing coins like zcash, monero, and dash.

Czech authorities, who are chairing EU government talks on the proposed bill, would be the latest nail in the coffin for anonymous payment methods following stringent new laws adopted over the summer.

Credit institutions, financial institutions, and crypto-asset service providers are forbidden from holding anonymity-enhancing coins, according to a November 9 legislation draft. The policy was meant to eliminate the risk of untraceable digital assets, which prevent blockchain snooping, mirrors one on anonymous instruments such as bearer shares and anonymous accounts.

The Czech plan responds to a demand from negotiating countries, said a diplomat who spoke anonymously about closed-door talks. The European Commission proposed the Anti-Money Laundering Regulation in July 2021 as part of a package that would also ban big cash transactions and create a new anti-money laundering body, AMLA, to evaluate large financial institution practices.

Crypto service providers outside the EU would need to verify if their counterparty is licensed and what money laundering controls they have, the document proposed. AMLA would determine the vetting criteria.

In similar amendments, European Parliament legislators focused on dirty money processing via the metaverse, decentralized finance, and non-fungible coins (NFTs). To become legislation, the bill needs Council and EP approval.

The EU’s Markets in Crypto Assets Regulation (MiCA), negotiated but not yet in force, prohibits exchanges from trading anonymous crypto assets unless they identify the holders. Monero and dash users must follow a separate set of restrictions for transferring funds.

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