The European Commission plans to ban anonymous cryptocurrency wallets

In a new effort to tighten regulation of the cryptocurrency sector, the European Commission, the EU executive, has announced that companies transferring Bitcoin or other cryptocurrencies must collect detailed information about senders and recipients to help authorities crackdown on dirty money.

The account sellvolbuytesla specializing in reporting on the crypto market also shared:

The European Commission is clamping down on anonymous cryptocurrency transactions

In its statement, the commission claims that the newly proposed law would make Bitcoin and other cryptocurrencies fully traceable:

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” the Commission said in a statement.

Therefore, a company handling cryptocurrency for a customer must include the customer’s information, like name, address, date of birth, and account number. Also the name of the person who will receive the crypto assets. The recipient’s service provider must also check if any of the required information is missing.

In addition, just as anonymous bank accounts are already banned under EU anti-money laundering rules, providing anonymous crypto-asset wallets will also be prohibited. This is part of the commission’s effort to fight terrorism financing and money laundering.

The reason is that the anonymity of cryptocurrencies would limit the ability to misuse crypto transactions for criminal purposes.

“These proposals have been designed to find the right balance between addressing these threats and complying with international standards while not creating an excessive regulatory burden on the industry,” the European Commission said. “On the contrary, these proposals will help the EU crypto-asset industry develop, as it will benefit from an updated, harmonized legal framework across the EU.”

EU states and the European Parliament are currently considering the bill. It means the proposal could take two years for them to become law.

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