Companies that transfer bitcoin or other cryptocurrencies will be required to retain information about the sender and recipient of the digital funds in order to stop it being used in crimes under a new EU rule.
A new law proposed by the European Commission aims to detect suspicious transactions and activities, something that has always surrounded cryptocurrency due to the anonymity of digital wallets.
The legislation focuses on a new central authority, the Anti-Money Laundering Authority, that will establish a single integrated system supervision across the 27 countries.
It “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 release. “Anonymous crypto asset wallets will be prohibited”, it added.
The commission has also placed a limit of €10,000 on large cash payments, in order to make it harder to launder dirty money in large amounts.
Companies handling cryptocurrencies will now have to ask for a customer’s name, address, date of birth and account number, as well as the people receiving the digital funds.
The European Parliament and the EU states will have to approve the proposals, meaning it could take up to two years for them to be enforced.
As well as the EU, China has infamously acted against cryptocurrency transactions. The country accounts for nearly 70 per cent of the world’s cryptocurrency mining, but banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
In June 2021, bitcoin’s price dipped ten per cent to $31,333 – close to half its peak in April of about $65,000 – in the wake of the news.
The move was a marked shift from its attitude in 2019, where a state-run newspaper ran a front-page story hailing bitcoin as the first successful application of blockchain technology, and China once was preparing to launch its own digital currency.
