Curiously enough, the cryptocurrency markets don’t seem to have responded yet to the news. Ethereum, Bitcoin, Bitcoin Cash and Litecoin are all maintaining their mini Bullish moment. But just yesterday, the European Parliament voted by a sweeping majority to support the December 2017 agreement with the European Council. This means tighter cryptocurrency regulation, in the hopes of bringing an end to the use of digital coins in financing terrorism and laundering money.
The members of parliament unanimously voted 574 yes votes against just 13 no votes and 60 abstentions.
Why Tighter Cryptocurrency Regulation is Needed
One of the biggest problems (or advantages, depending on how you look at it) of cryptocurrency is its anonymity. While some cursory controls are in place, currently there are not enough controls to prevent money laundering and other criminal activity. Many blockchain experts around the globe have labeled the current cryptocurrency environment akin to the wild west. Lawless and rampant with money laundering and crime.
Under the new legislation proposed by the EU parliament, anonymity of transactions will be the first point to address. This will mean tighter rules for cryptocurrency platforms and exchanges, as well as crypto wallet providers. These entities will now have to register with authorities and must carry out due diligence procedures and more cryptocurrency regulation. This will include KYC and other such verification practices.
This new directive will be enforced right after publication in the Official Journal of the European Union, and then the EU member countries will have 18 months to implement the new rules into their independent nations.
According to Krisjanis Karins, Member of the European Parliament (MEP) and co-rapporteur, “Criminal behaviour hasn’t changed. Criminals use anonymity to launder their illicit proceeds or finance terrorism. 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.”
A Crackdown on Criminal Behavior
Judith Sargentini, co-rapporteur and MEP, added that “billions of euros” each year are drained away through money laundering and tax evasion and avoidance. Moreover, terrorism financing is too easy and going unchecked. This is the money, she stressed, that “should go to fund our hospitals, schools and infrastructure. “With this new legislation,” Sargentini continued, “we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence.”
This new crackdown will also include several penalties across the European Union for anyone convicted of money laundering. The European Council’s December consensus agreement was claimed to be “an important milestone in the fight against organised crime at a European level.”