EU Parliament Supports New Rules To Track Crypto Money Transfers, Everything Must Be Reported

JAKARTA - European Union lawmakers backed new protective rules to track transfers of bitcoin and other cryptocurrencies on Thursday, March 31. This is the latest sign that EU regulators have tightened the freewheeling sector.

Two committees in the European Parliament voted 93 in favor and 14 against the cross-party compromise rule, which crypto exchange Coinbase Global Inc warned would usher in a surveillance regime that stifles innovation.

The $2.1 trillion (IDR 30 quadrillion) crypto sector is currently still subject to uneven regulation around the world.

Under a bill first proposed last year by the EU's European Commission Executive, crypto companies such as exchanges must obtain, withhold and transmit information about those involved in transfers.

"The regulation will make it easier to identify and report suspicious transactions, freeze digital assets and prevent high-risk transactions," said Ernest Urtasun, a member of Spain's Green Party lawmaker, as quoted by Reuters.

There is currently no EU requirement to track cryptocurrency transfers and the Commission has proposed implementing new rules for transfers worth 1.000 euros (IDR 16 million) or more, but MPs last Thursday voted to remove the 'de minimis' threshold, meaning all transfers will fall within the scope of this new rule.

Urtasun said removing the threshold brought the bill in line with rules from the global Financial Action Task Force that set standards to combat money laundering. The new rules mean crypto companies must collect and share data about their transactions.

The legislature's committee also supports sending transfers from 'unhosted' crypto wallets held by individuals, not exchanges, under traceability rules, and on the creation of a list by the EU's European Banking Authority of high-risk or inappropriate crypto asset service providers.

Coinbase's Chief Legal Officer, Paul Grewal, said in a blog on Monday, March 28, that traditional cash, not crypto, is by far the most popular way to hide financial crimes.

EU countries have a common opinion with parliament on the draft law and representatives from both sides will now meet to agree on the final version of the bill. Countries have agreed among themselves that there should be no de minimis.