Cryptocurrencies Can Now Be Monitored By European Union Regulatorsbr>
The European Parliament has passed the European Union’s Fifth Anti-Money Laundering Directive that allows authorities to monitor cryptocurrency.
The Fifth Anti-Money Laundering Directive is part of the European Commission’s Action Plan of February 2016 to strengthen the fight against terrorist financing. It sets out a series of measures to better counter the financing of terrorism. It was passed by the Parliament on June 19 and published in Official Journal L156 of the European Union.
Under the new directive, Financial Intelligence Units (FIU) will be allowed access to information which will enable them to associate cryptocurrency addresses to the identity of the owner of the virtual currency. The goal of the new directive is to prevent risks associated with the use of virtual currencies for terrorist financing and to ensure increased transparency of financial transactions.
“For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies,” the directive said. “Such monitoring would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.”
The new directive, however, said that the crypto field will remain largely anonymous, and the regulators will examine the possibility of self-reporting in the future. EU Member states has been given 18 months to transpose the new rules into their national legislation.