The European Union (EU) reached a new deal on Wednesday as the policymakers have figured out ways to curb money laundering activities implemented using cryptocurrencies, according to a press statement.
EU brings exchanges under the “Travel Rule”
The EU bill will not have any minimum threshold requirements or exemptions for low-value transfers on any cryptocurrency exchange or crypto asset service providers (CASPs). With the new deal coming in place, CASPs will come under the Financial Action Task Force’s “Travel Rule” and, as a result, will be required to collect information related to every transaction.
The EU bill, titled the Transfer of Funds Regulation, will require CASPs to collect and send customer data with transactions. CASPs will also have to provide information regarding transactions and other customer data if authorities require them to do so in the light of an ongoing investigation related to money laundering and terrorist financing.
“This new regulation strengthens the European framework to fight money laundering, reduces the risks of fraud, and makes crypto-asset transactions more secure,” said Ernest Urtasun, co-rapporteur of the bill.
Urtasun added that this EU bill will introduce “one of the most ambitious travel rules for transfers of crypto assets in the world.”
Un-hosted wallets, i.e., wallets that are not integrated into a crypto exchange and hence directly managed by a user, will also come under the new EU rule only when a user interacts with a hosted wallet. However, transactions from un-hosted to un-hosted wallets do not come under this rule.