EU Parliament: Bitcoin should not be anonymous

The European Parliament recently issued a report containing amendments to anti-money laundering and terrorist financing regulations. The proposed amendments state, among other things, that digital currencies “should not be anonymous”.

The European Commission has previously made a proposal to amend the regulations so that they also apply to digital currencies, such as bitcoin. The committee’s earlier proposal included exchanges of digital currencies and services that offer wallets, so that they would fall under anti-money laundering regulations.

Following a proposal from the European Commission, it is up to the European Parliament to incorporate the proposed changes into the legislation or to make an adjustment to the proposal. In this case, parliament has chosen to amend the proposal. Parliament’s amendments emphasize the anonymity of digital currencies and broaden the range of companies that are subject to regulation.

‘Virtual currencies’ means a digital representation of value that is neither issued by a central bank or a public authority, nor attached to a legally established currency, which does not possess the legal status of currency or money, but is accepted by natural or legal persons as a means of exchange or for other purposes, and can be transferred, stored or traded electronically. Virtual currencies cannot be anonymous .

It is unclear exactly how parliament envisages this. Digital currencies are often inherently anonymous, or can be used anonymously when desired. In addition, anonymity is closely linked to fungibility , a property that is desirable for any currency. The parliament wants it to be possible for the investigative services to link a (bitcoin) address to the identity of the owner.

To combat the risks related to the anonymity, virtual currencies should not be anonymous and national Financial Intelligence Units (FIUs) should be able to associate virtual currency addresses to the identity of the owner of virtual currencies.

In addition to the extra focus on the anonymity of digital currencies, parliament is broadening the types of services that are subject to regulation. The parliament states that under current regulations, many services dealing with or dealing in digital currencies are not required to report suspicious activity, allowing “terrorist groups to enjoy some form of anonymity when moving money into and within the EU”. Parliament therefore wants more services to be regulated:

It is therefore essential to extend the scope of Directive (EU) 2015/849 so as to include virtual currency exchange platforms, custodian wallet providers, issuers, administrators, intermediaries and distributors of virtual currencies, and administrators and providers of systems for online payments .

The regulatory changes are a work-in-progress , it is now back to the committee to respond to the changes made by parliament. The new regulations should come into force from 26 June 2017 for all European member states.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

© 2024 Cryptocoin