European Parliament Votes for Increased Cryptocurrency Regulation

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The European Parliament voted strongly in favor of regulations, which would deter cryptocurrency-based money laundering and terrorism financing.

On April 19, 2018, members of the European Parliament approved a December agreement with the European Council, which calls for “closer regulation of virtual currencies, like Bitcoin, to prevent them being used for money laundering and terrorism financing.” The final vote was 574 in favor, with 13 opposed, and 60 abstentions.

“In a bid to end the anonymity associated with virtual currencies, virtual currency exchange platforms and custodian wallet providers will, like banks, have to apply customer due diligence controls, including customer verification requirements,” explained a release on the matter. Readers may be more familiar with the terminology KYC, an abbreviation for “Know Your Customer.”

In addition to these identification standards, under the agreement, cryptocurrency trading platforms and wallet providers (among other services) will require registration. The Parliament also supported measures to provide public access to information on the real owners of firms and incorporated “protection[s] for whistleblowers who report money laundering (including the right to anonymity),” among other issues.

Co-rapporteur Krišjānis KARIŅŠ, a Latvian MEP said:

“This legislation helps address the threats to our citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating virtual currencies and anonymous prepaid cards.”

In another cryptocurrency-related matter, last month, the European Commission (another institution of the European Union) published an 18-page FinTech action plan, which among other things, addressed the regulatory treatment of crypto-assets, licensing schema for crowdfunding platforms, and potential rulemaking related to blockchain technology.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.

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