EU Presents First EU Crypto Draft

European Union has made a provisional deal on a new bill, which will be called the EU Crypto Draft. The regulations include tracing crypto-assets and identifying suspicious transactions. This includes using a digital wallet, for example, Bitcoin, or electronic money tokens.

This is an essential step toward creating rules that will allow the European Union to gain control over the use of cryptocurrencies. The new law also includes measures and sanctions, and it must do it before making the assets available to beneficiaries.

The new EU crypto draft must also align with MiCA Markets in Crypto-assets rules. These rules require crypto exchanges and other platforms to identify suspicious transactions and report them to authorities.

Also Read: Russian Crypto Draft Goes Gentle With Investors

The new regulation aims to prevent and detect money laundering and is expected to decrease fraud risk and secure crypto-asset transactions.
One of the most critical aspects of this rule is that CASPs help law enforcement agencies around the world identify sanctioned addresses.

It has introduced one of the most travel rules for transfers of crypto assets worldwide. Besides, it is expected that other jurisdictions will follow the approach agreed by the co-legislators.

According to Assita Kanko, co-rapporteur for LIBE, crypto-assets remain under the radar of law enforcement for a long time. Terrorists used crypto to increase their funds and access child pornography. Their works harmed people’s lives and raised doubts about the crypto sector. A big step is taken to address these problems: therefore, it becomes harder to misuse crypto-assets.

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Response On The EU Crypto Draft

Ernest Urtasun, co-rapporteur for ECON, states that the new regulation strengthens the European framework to fight money laundering.
He adds that it helps to decrease fraud risk and secure crypto-asset transactions. This rule ensures that CASPs help to stop and identify sanctioned addresses.

The EU crypto draft increases the travel rule that existed in traditional finance already. Hence, the rule needs details on the asset source and its travels with the transaction. Besides, it also requires the information stored on both sides of the transfer.

With this rule, it will be possible to trace the source of any asset or funds that are being transferred to other parties. Furthermore, it will also provide a complete picture of the transaction and its purpose.

When an investigation occurs on terrorist financing and money laundering, Crypto-assets service providers give the details to competent authorities.

Also Read: XCarnival Smart Protocol Down After Cyber Attack

It is essential to keep personal data secured. For example, as the travel rule requires, you must protect your name and address. However, negotiators agreed that no information would be sent if privacy was not guaranteed to uphold by the receiving end.

No risk of terrorism financing and money laundering

The regulations also apply to transactions from wallets that are not hosted. When private users use hosted wallets, they interact with a crypto-asset wallet address on their own.

Clients may sometimes transfer or receive more than 1000 euros to or from their unhosted wallet. When this occurs, the CASP must confirm that the client owns the unhosted wallet. Keep in mind that if a person-to-person transfer is made without the assistance of a provider, these regulations do not apply. Platforms for exchanging bitcoins are one example of it.

Deep Gautam

Deep Gautam is an Editor at Tech Heralds.

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