{"id":12989,"date":"2023-05-22T12:30:34","date_gmt":"2023-05-22T12:30:34","guid":{"rendered":"http:\/\/TheNextWeb=1396650"},"modified":"2023-05-22T12:30:34","modified_gmt":"2023-05-22T12:30:34","slug":"crypto-payments-can-now-be-traced-like-bank-transfers-under-new-eu-law","status":"publish","type":"post","link":"https:\/\/www.londonchiropracter.com\/?p=12989","title":{"rendered":"Crypto payments can now be traced like bank transfers under new EU law"},"content":{"rendered":"\n
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The EU Parliament agreed last week on the world\u2019s first comprehensive set of rules to regulate the transfer of cryptocurrencies<\/a> like Bitcoin, as it looks to crack down on money laundering and illegal transfers in the bloc.<\/span><\/p>\n

From 2024, all crypto transfers, regardless of amount, will be covered by the so-called \u2018travel rule\u2019 \u2014 <\/span>information on the source of the asset and its beneficiary will have to travel with the transaction and be stored on both sides of the transfer. <\/span><\/p>\n

The regulation requires firms that want to issue, trade, and safeguard crypto-assets, tokenised assets, and stablecoins in the 27-country bloc to obtain a licence.  <\/span><\/p>\n

\u201cRecent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of the crypto industry for the purposes of money laundering and financing of terrorism,\u201d <\/span>said<\/span><\/a> Swedish finance minister Elisabeth Svantesson. <\/span><\/p>\n

MiCA \u2014 as the new regulation is known \u2014 is designed to ensure that crypto transfers within the EU can be traced in much the same way as ordinary bank transfers. Furthermore, they are meant to <\/span>protect investors by increasing transparency and putting in place a comprehensive framework for issuers and service providers including compliance with the anti-money laundering rules. <\/span><\/p>\n

The new rules also require crypto-asset service providers to share mandatory information with tax authorities through an automatic exchange. H<\/span>owever, they do not apply <\/span>to person-to-person transfers conducted without a provider or among providers acting on their own behalf. <\/span><\/p>\n

Additionally, the European Securities and Markets Authority (ESMA) will be given powers to step in and ban or restrict crypto platforms if they are seen to not properly protect investors, or threaten market integrity or financial stability.<\/span><\/p>\n

Cryptocurrencies like Bitcoin trace transactions via a blockchain record. While all transactions are recorded in a publicly-accessible ledger, they can only be traced back to a user\u2019s public key, not their real-world personal information. T<\/span>his pseudo-anonymity is what <\/span>drew<\/span><\/a> many to invest in crypto in the first place, but it poses a number of risks. <\/span><\/p>\n

Currently, when dealing with crypto-assets, people are not covered by EU consumer protection rules and risk losing money. Furthermore, the EU <\/span>fears<\/span><\/a> that the widespread use of crypto could drive financial instability, market manipulation, and financial crime. <\/span><\/p>\n

In 2022, the amount of cryptocurrency obtained either illegally or for groups or individuals to use for illicit purposes \u2014 including <\/span>terrorism<\/span><\/a> and human trafficking \u2014 stood at just over $20bn, according to Chainalysis, a platform that provides data on blockchain technology.<\/span><\/p>\n

The technology also uses vast quantities of electricity: the energy consumption of bitcoin is <\/span>estimated<\/span><\/a> to equal that of a small country. <\/span><\/p>\n

So far, policies worldwide have ranged from ignoring to fully banning the use of cryptocurrencies. The UK has<\/span> outlined a phased approach, starting with stablecoins and broadening out to other crypto-assets later on, but there is no firm timeframe. Meanwhile, the US has taken somewhat of a \u2018case by case\u2019 approach to the matter <\/span>like <\/span>prosecuting individuals<\/span><\/a> or working to <\/span>recover ransomed funds.<\/span><\/a> <\/span><\/p>\n

In a departure from the global trend, MiCA is slated to be the world\u2019s first comprehensive set of rules to regulate crypto-assets. This is part of a <\/span>package<\/span><\/a> of legislative proposals to strengthen the EU\u2019s anti-money laundering and countering terrorism financing rules, presented by the Commission in 2021. The package also includes a proposal to create a new EU authority to fight money laundering.<\/span><\/p>\n

MiCA also addresses environmental concerns surrounding crypto, with firms forced to disclose their energy consumption as well as the impact of digital assets on the environment.<\/span><\/p>\n

Rather than scaring away crypto firms, MiCA is expected to attract <\/span>both startups and prominent businesses, setting the stage for more healthy competition. <\/span><\/p>\n

According to <\/span>Reuters<\/span><\/a>, crypto firms say they welcome the \u201ccertainty in regulation\u201d, putting pressure on countries to copy the EU rules, and on regulators to come up with global norms for cross-border activity. <\/span><\/p>\n

Brinda Paul, director of compliance at Australian crypto-asset firm Banxa, <\/span>told<\/span><\/a> CryptoPotato<\/span><\/i> that he believes MiCA \u201csets a high standard for consumer protection\u201d, which will create a more reliable and trustworthy crypto market and \u201cbenefits customers immensely.\u201d<\/span><\/p>\n

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Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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