New EU proposal aims to tighten crypto deposit regulations

The European Commission has put forward a new proposal requiring crypto asset service providers to collect more anti-money laundering (AML) information from users who use cryptocurrencies to transfer funds. The declared aim of this proposal is to prevent the further spread of money laundering within the EU.

According to the proposal, remittance service providers must have the name of the remitter, the account number where the account exists and be used to process the transaction. The address of the sender, the official ID number, the customer number or the date and place of birth are also required as part of the proposal. Similarly, service providers should ensure that the beneficiary’s name and account number are included in the transfer process along with information about where the account is located. The beneficiary’s crypto-asset provider also needs procedures to identify whether information about the sender of the transmission is included or missing.

Related: French government sponsors an EU-wide crypto regulator

These additional information requirements take effect if the transfer exceeds EUR 1000 or if a series of payments appears to be linked and the total amount exceeds EUR 1000. The committee said in the proposal:

“In order not to impair the efficiency of payment systems and crypto-asset transfer services and to weigh the risk of promoting underground transactions due to excessively strict identification requirements against the potential terrorist threat posed by small transfers.”

In the event that there is a series of payments over 1000 EUR that are not linked, the payment service provider does not need to verify the information, unless that concerns “the withdrawal of the money”. anonymized cryptocurrency, “or” there are well-founded suspicions of money laundering or terrorist financing “.

Related: EU is considering new money laundering regulator and stricter crypto reporting requirements

The update requests are part of four legislative proposals submitted by the European Commission on July 20th. All proposals aim to improve the detection of suspicious transactions, prevent money laundering and the financing of terrorist activities. The European Parliament will have the final say on the proposals and it can take up to two years for the proposals to enter into force.