News: The EU has reached an agreement on AML when transferring crypto assets

Crypto assets, as you know, are digital money that have proven to be a popular alternative to real money. Crypto assets can be used on various platforms to pay for services or simply to store your funds in one or another crypto instrument. Platforms based on cryptoassets are usually built in such a way that they do not have a central owner, but they exist thanks to their distributed client base.

Crypto assets and cryptocurrency, in particular, raise questions in terms of the possibility of their use within the legal framework. The main problem is that the concept of crypto assets originated in a technical environment, without regard to any legal aspects. Due to the flexibility of use and the availability of payment value, crypto assets are becoming more widespread. The increased popularity requires finding an answer to the question of their legal nature and inclusion in the legal field in order to maintain a balance of interests of all parties to economic relations.

AML (Anti-Money Laundering, Anti-Money Laundering) are the principles of combating money laundering, terrorist financing and the creation of weapons of mass destruction. The procedure includes the identification, storage and exchange of information about users, their income and transactions between organizations and departments.

Thus, it has recently become known that the European Parliament has provisionally accepted the proposal of the Council of the EU to extend the "travel rule" to information accompanying electronic transfers of crypto assets as a measure of protection against money laundering (AML).

From now on, crypto asset service providers operating in the EU will have to collect and provide complete information about the sender and recipient of crypto asset transfers they make so that they can be traced or blocked, regardless of the value of the transaction. Special requirements will apply to transfers of crypto assets between crypto asset service providers and non-hosted wallets.

"Rules of travel" for crypto transfers are already provided for in FATF Recommendations 15 and 16. However, only a few jurisdictions have implemented them due to technical difficulties for crypto transactions, which are structurally different from electronic transfers made by traditional payment service providers.

The EU Council said the agreed proposal, originally developed by the European Commission, would reconcile competitiveness, consumer and investor protection, and protecting the financial integrity of the internal market. Separate data protection rules will not be created for funds transfers and the EU General Data Protection Regulation will remain applicable to everyone.

The new rule will ease the application of financial sanctions against individuals and entities subject to restrictive measures, the EU Council said in a statement: “Cryptoasset service providers will be required to implement appropriate internal policies, procedures and controls to reduce the risks of evading national and union restrictive measures. measures." 

Ultimately, EU member states will have to enact legislation to ensure that all crypto asset service providers qualify as obligated entities under the EU's Fourth Anti-Money Laundering Directive.

The proposal of the Council of the EU also provides for the creation of a new anti-money laundering body operating throughout the EU. This body will promote the harmonization and coordination of supervisory practices in the financial and non-financial sectors. This includes facilitating direct supervision of high-risk monetary institutions and cross-border financial companies, as well as coordinating the activities of financial intelligence units. It will also be given direct oversight powers over certain types of lending and financial institutions, including crypto asset service providers.

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