The European Parliament has supported an agreement to bring closer regulation to cryptocurrencies.
Members of the European Parliament voted by a large majority on Thursday to support an agreement reached with the European Council in December to bring cryptocurrencies under closer regulation to prevent them from being used for money laundering and terrorism financing. The decision was passed with 574 yes votes, 13 nays and 60 abstentions.
The new measures are intended to address risks linked to cryptocurrencies. Under the new measures, cryptocurrency service providers, such as crypto exchange platforms and custodian wallets, will have to apply customer due diligence controls, including customer verification requirements. These platforms and providers will also have to be registered in order to offer regulated exchange and payment services.
The updated directive will enter into force three days after its publication in the Official Journal of the European Union. Member states will then have 18 months to transpose the new rules into national law.
Krisjanis Karins, member of the European Parliament (MEP) and co-rapporteur, said criminals use anonymity to launder their illicit proceeds or finance terrorism. This legislation helps address the threats to EU citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating cryptocurrencies and anonymous prepaid cards.
Judith Sargentini, another co-rapporteur and MEP, said that billions of euros, which can be used to fund hospitals, schools and infrastructure, are being lost every year to money laundering, terrorism financing, tax evasion and avoidance.
“With this new legislation, we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence,” said Sargentini. “This will shine a light on those who hide behind companies and trusts and keep our financial systems clean. These rules will also be of enormous benefit to developing countries and their fight against illicit outflows of money which is desperately needed for investment in their own societies.”
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