The European Union to identify Cryptocurrency Users

The European Union to identify Cryptocurrency Users

The European Parliament and the Council of the European Union have proposed amending a directive which aims to prevent money laundering and terrorist

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The European Parliament and the Council of the European Union have proposed amending a directive which aims to prevent money laundering and terrorist financing. Cryptocurrency exchanges and wallets will be required to identify suspicious activity, including bitcoin users.

The proposal (available at http://data.consilium.europa.eu/doc/document/ST-15605-2016-INIT/en/pdf) amends EU directive 2015/849 as technology has created alternatives for financing that are beyond the scope of EU legislation, wrote cryptocoinnews.com.

“Flows of illicit money can damage the integrity, stability and reputation of the financial sector, and threaten the internal market of the Union as well as international development. Money laundering, terrorism financing and organised crime remain significant problems which should be addressed at Union level. In addition to further developing the criminal law approach at Union level, targeted and proportionate prevention of the use of the financial system for the purposes of money laundering and terrorist financing is indispensable and can produce complementary results.”, according to EU directive 2015/849 available at eur-lex.europa.eu.

Under the new proposal, The European Parliament has also approved the establishment of a task force that will investigate the role of cryptocurrencies like bitcoin and blockchain technology.

The anonymity of cryptocurrencies makes them a preferred choice for criminal activities. For this reason, authorities should be able to monitor their use, according to the proposal quoted in cryptocoinnews.com.

To counteract risks related to anonymity, national Financial Intelligence Units should have the right to associate cryptocurrency addresses to the identity of their owners. Also, users can be allowed to self-declare to authorities on a voluntary basis, explained cryptocoinnews.com.

The proposal also addresses anonymous prepaid cards that can be used for suspicious activities. It is important to lower the thresholds for anonymous prepaid cards. Remote transactions exceeding 50 Euros should be monitored by authorities who will have the right to identify the customer, noted the proposal quoted in cryptocoinnews.com.

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