Cryptocurrencies such as Bitcoin and Ethereum should no longer be an Eldorado for money laundering and terrorist financing, say MEPs.
“Regulating cryptocurrencies is just as important as the fight against terrorism. It’s clear that, especially now with Russia’s horrible war on Ukraine, we have to get this right. We need to make sure our law enforcement authorities are well equipped to fight the evasion of sanctions,” said Flemish ECR MEP Assita Kanko, who is co-rapporteur on a report on information accompanying transfers of funds and crypto-assets that has been adopted in the joint Committee on Economic and Monetary Affairs and Committee on Civil Liberties, Justice and Home Affairs today.
The report will improve the supervision of transactions in crypto assets. So far, crypto assets have not fallen within the scope of the usual regulations concerning banknotes and coins, book money and electronic money. Speaking after of the vote, Ms Kanko said: “trade in cryptocurrencies has boomed in recent years. Unfortunately, criminals and terrorists use the anonymity of crypto-currencies for fundraising and transfers. Al-Qaeda, Hezbollah and others, for example, are active on social media with campaigns calling on others to ‘Fund the Islamic Struggle without Leaving a Trace’. The new regulation will make these criminal activities much more difficult for them.”
Under the new regulation, information on the originators and beneficiaries of crypto asset transfers must be obtained, verified, retained and transmitted to the counterparty. Data protection also needs to be guaranteed throughout.
Kanko added: “The European Union is making an important step towards a better supervision of crypto transactions. This supervision is perfectly normal in the financial world, for example in the case of transfers in euros or dollars. Now that crypto has become so big and so much money is involved, it is logical to organise supervision there too. In this way we protect citizens from criminal activities, we protect well-intentioned investors and traders in crypto currency, and we increase trust in the crypto sector with all its energy and innovative power.”
Negotiations with the European Council are expected to take place in April and May. The final text with the European rules for monitoring crypto transactions is expected to be finalised before summer.