It looks like Bitcoin is here to stay; contrary to widespread belief of the global hype of cryptocurrency being merely temporary; it appears the European Union is paving the way in legitimizing this new era for cryptocurrency by agreeing to place legal regulation upon cryptocurrency exchange platforms as an anti-money laundering measure.
The European Parliament in correlation with the European Council have mutually agreed to a new set of regulations; one of them being to remove the anonymity of users of cryptocurrency exchange platforms.
The new regulations to be set by the EU are as follows:
- Obligating exchange platforms and Bitcoin wallet providers to identity their clients.
- Set limits upon pre-payment cards.
- Increase transparency requirements for company and trust owners.
- Permit national investigators and regulators more access to information, including national bank account registers.
- Grants access to data on the beneficiaries of trusts to “persons who can demonstrate a legitimate interest”.
A Move to Combat Money Laundering and Terrorist Financing
In wake of the recent terrorist attacks in Europe and the risk of cryptocurrency being used as a form of payment to facilitate such attacks in the future, the European Commission undertook the decision to implement the regulations on the cryptocurrency.
Additionally, the recent Panama Papers and Paradise Papers leaks, has also played a significant role in Europe’s decision to focus on combating tax avoidance and money laundering.
Ceera Jouriva, Europe’s Justice Commissioner, praised the new regulations stating that the ‘agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing.’
What’s more, Transparency International described the new regulations as a ‘breakthrough’ however they also did express that there will still be loopholes, including a ‘lack of public access to information on the beneficiaries of trusts and similar arrangements.’
On the other side of the coin lay Britain, Malta, Cyprus, Luxembourg and Ireland according to EU lawmaker and Dutch politician, Judith Sargentini, specified that the aforementioned jurisdictions were opposed to the mew regulations as they fear it may impact their economies negatively.
New Revision of the Fourth Anti-Money Laundering Directive
The recent spike in Bitcoin prices by over 1,700 percent as of the beginning of 2017 has contributed to the legitimacy of cryptocurrencies by regulatory bodies resulting in the EU’s revision of the Fourth Anti-Money Laundering Directive.
The EU’s 2015 “Fourth Anti-Money Laundering Directive”, which at the time was Europe’s most significant anti-money laundering directive is now been revised to include new rules formally regulating cryptocurrency. It is excepted that the new rules will officially adopted by the EU’s member states and turned into national law within the next 18 months.