The European Union Intends To Impose Stricter Regulations On Cryptocurrency Transactions.
The European Union will soon decide whether to accept a plan that would require cryptocurrency companies to collect data on both senders and recipients in a transaction.
The European Union “travel rule” requires banks and payment processors to keep track of information that “travels” between payers and recipients.
However, the European Parliament is about to vote on broadening the scope of the travel restriction to include cryptocurrency enterprises. The vote is set to take place in the following weeks.
Every financial transaction above 1,000 euros must be notified to financial authorities under the travel rule. While this has been heralded as a victory for anti-money laundering (AML), the new proposal proposes to reduce the reporting threshold.
If the proposal is approved, exchanges will be required to register all cryptocurrency transactions, even those as small as five euros.
The bill’s supporters say that minor cryptocurrency transactions are frequently used to fund terrorism or launder money. Because illicit money may travel anonymously and without territorial constraints, such a loophole would allow the use of digital assets to fund and conceal criminal acts.
Ajinkya Tulpule, head of compliance at cryptocurrency exchange bitFlyer, said:
“A lot of exchanges have lobbied hard against it, as you can imagine, but from what I heard from a chat with an MEP recently, the majority of the are in favor of removing the threshold,”
Tulpule stated that crypto exchanges may have to postpone certain transactions until the Know Your Customer (KYC) processes are fully completed. This could result in transaction delays, among other difficulties.
“Some coins are not covered by transaction monitoring systems,” explains Tulpule. This is just another disadvantage that cryptocurrency exchanges will have as they adjust to the new regulatory system.
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.
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The European Union Intends To Impose Stricter Regulations On Cryptocurrency Transactions.
The European Union will soon decide whether to accept a plan that would require cryptocurrency companies to collect data on both senders and recipients in a transaction.
The European Union “travel rule” requires banks and payment processors to keep track of information that “travels” between payers and recipients.
However, the European Parliament is about to vote on broadening the scope of the travel restriction to include cryptocurrency enterprises. The vote is set to take place in the following weeks.
Every financial transaction above 1,000 euros must be notified to financial authorities under the travel rule. While this has been heralded as a victory for anti-money laundering (AML), the new proposal proposes to reduce the reporting threshold.
If the proposal is approved, exchanges will be required to register all cryptocurrency transactions, even those as small as five euros.
The bill’s supporters say that minor cryptocurrency transactions are frequently used to fund terrorism or launder money. Because illicit money may travel anonymously and without territorial constraints, such a loophole would allow the use of digital assets to fund and conceal criminal acts.
Ajinkya Tulpule, head of compliance at cryptocurrency exchange bitFlyer, said:
“A lot of exchanges have lobbied hard against it, as you can imagine, but from what I heard from a chat with an MEP recently, the majority of the are in favor of removing the threshold,”
Tulpule stated that crypto exchanges may have to postpone certain transactions until the Know Your Customer (KYC) processes are fully completed. This could result in transaction delays, among other difficulties.
“Some coins are not covered by transaction monitoring systems,” explains Tulpule. This is just another disadvantage that cryptocurrency exchanges will have as they adjust to the new regulatory system.
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
Patrick
CoinCu News
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