July 20 (Reuters) – Businesses transferring bitcoin or other crypto assets must collect information on senders and recipients to help authorities tackle dirty money, EU policymakers suggested on Tuesday in part of the latest efforts to tighten regulation of the sector.
The law proposed by the European Commission, the EU executive, would apply what is known as the travel rule to crypto transactions to make them traceable.
The rule, which is part of the recommendations of the intergovernmental watchdog, the Financial Action Task Force (FATF), already applies to wire transfers.
“Today’s amendments will ensure full traceability of transfers of cryptographic assets, such as bitcoin, and will prevent and detect their possible use for money laundering or terrorist financing purposes,” said the Commission said in a statement.
A business that manages crypto-assets for a customer should include the customer’s name, address, date of birth, and account number, as well as the name of the person who will receive the crypto-assets.
The recipient’s service provider should also check if any of the required information is missing.
The provision of anonymous crypto-asset wallets will also be prohibited, just as anonymous bank accounts are already prohibited under EU anti-money laundering rules.
“These proposals were designed to strike the right balance between tackling these threats and meeting international standards without creating an excessive regulatory burden on the industry,” said the European Commission.
“On the contrary, these proposals will help the European crypto-asset industry to grow, as it will benefit from an updated and harmonized legal framework across the EU.”
EU states and the European Parliament have the final say on the proposals, which means it could take two years for them to become law.
Reporting by Huw Jones; edited by Barbara Lewis
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