End of Crypto-Anonymity? EU to Allow Regulators to Monitor Coins, Wallets
- A new EU directive allows Financial Intelligence Units to monitor cryptocurrencies to fight money laundering and terrorism
On Tuesday the European Union published its Fifth Anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term Directive (Directive (EU) 2018/843), aiming to both detect and investigate money laundering and prevent it from occurring.
The new directive, amending the prior Directive (EU) 2015/849, was passed by the European Parliament and the European Council and published in Official Journal L156 of the European Union.
Combating anonymity
The directive acknowledges that the inclusion of providers will not completely remove all anonymity with virtual currencies, and in large part, the environment will remain anonymous as it is not essential to make transactions with such providers.
However, to combat the risks related to anonymity, Financial Intelligence Units (FIUs) will be allowed access to information which will enable them to associate virtual currency addresses to the identity of the owner of the virtual currency.
The directive highlighted the ability of terrorists to fund their actions through virtual currencies. It identified that providers engaged in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term services between virtual currencies and fiat currencies as well as custodian wallet providers are under no obligation to identify suspicious activity.
Member state legislation will follow
According to the directive, “it is [sic] essential to extend the scope of Directive (EU) 2015/849 so as to include providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers [sic] For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies."
The directive went on saying: "Such monitoring would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.”
It adds that the possibility of allowing users to self-declare to designated authorities on a voluntary basis should be further assessed.
EU Member states will need to amend their national laws, regulations, and administrative provisions to comply with the directive by January 2020.
On Tuesday the European Union published its Fifth Anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term Directive (Directive (EU) 2018/843), aiming to both detect and investigate money laundering and prevent it from occurring.
The new directive, amending the prior Directive (EU) 2015/849, was passed by the European Parliament and the European Council and published in Official Journal L156 of the European Union.
Combating anonymity
The directive acknowledges that the inclusion of providers will not completely remove all anonymity with virtual currencies, and in large part, the environment will remain anonymous as it is not essential to make transactions with such providers.
However, to combat the risks related to anonymity, Financial Intelligence Units (FIUs) will be allowed access to information which will enable them to associate virtual currency addresses to the identity of the owner of the virtual currency.
The directive highlighted the ability of terrorists to fund their actions through virtual currencies. It identified that providers engaged in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term services between virtual currencies and fiat currencies as well as custodian wallet providers are under no obligation to identify suspicious activity.
Member state legislation will follow
According to the directive, “it is [sic] essential to extend the scope of Directive (EU) 2015/849 so as to include providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers [sic] For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies."
The directive went on saying: "Such monitoring would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.”
It adds that the possibility of allowing users to self-declare to designated authorities on a voluntary basis should be further assessed.
EU Member states will need to amend their national laws, regulations, and administrative provisions to comply with the directive by January 2020.