The European Commission (EC) has unveiled a set of proposalsaimed at making cryptocurrency transfers more “strict”by adopting existing laws against terrorist financing (CTF).
A key change is that it will prohibit all cryptocurrency service providers from offering anonymous cryptocurrency wallets, while existing AML rules will be extended to the entire cryptocurrency sector, including all cryptocurrency service providers (CASPs).
The EC states the following: “Today’s amendments will ensure the full traceability of transfers of cryptocurrencies, such as Bitcoin, and will allow the prevention and detection of their possible use for money laundering or terrorism. In addition, anonymous cryptocurrency wallets are prohibited.”
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Providers should collect name, address, official personal document number, customer identification number or date and place of birth.
The EC further adds: “Currently, only certain categories of crypto-asset service providers are included in the scope of the EU AML/CFT rules. The proposed reform would extend these rules to the entire cryptocurrency sector, obliging all service providers to conduct due diligence on their customers.”
The cryptocurrency proposal outlines future obligations on all virtual asset service providers (VASPs) “to collect and make accessible data on the creators and beneficiaries of transfers of virtual or crypto assets.”.
The EC is concerned that differences in AML/CFT laws between EU member states are being exploited by organised crime for money laundering and terrorist financing.
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The EC proposal notes the following: “Transfers of virtual assets are currently outside the scope of EU financial services legislation. The lack of such rules leaves holders of crypto assets exposed to money laundering and terrorist financing.”
Current EU rules do not cover the tracing of virtual asset transfers and information exchange obligations between cryptocurrency service providers, as the existing rules only apply to bank transfers.
CASPs must ensure that transfers of crypto assets are accompanied by the name of the originator, the originator's account number, where such an account exists, and is used to process the transaction it is declaring.
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Other information that CASPs should collect for the transfer of cryptographic data includes the payer's address, official personal document number, customer identification number, or date and place of birth.
On the beneficiary side, the CASP “must implement effective procedures to identify whether information about the originator is included in, or follows, the transfer of cryptocurrency.”.
These rules will remain proposals until the European Parliament votes in favour of the amendments.
Information source: zdnet.com
