The European Commission has presented a new proposal that would require crypto-asset service providers to collect additional anti-money laundering (AML) data from consumers who send money using cryptocurrencies. The declared goal of this proposal is to prevent money laundering from spreading further within the EU.
According to this proposal, service providers processing transfers must have the name of the transfer’s originator, the account number, and the account’s location where the account exists and is used to complete the transaction. The idea would also require the originator’s address, official personal document number, customer ID number, or date and place of birth. Similarly, service providers must verify that the beneficiary’s name and account number, as well as information regarding the account’s location, are included in the transfer. Procedures for detecting whether the information for the transfer’s originator is included or missing would also be required by the beneficiary’s crypto-asset provider.
When a transfer exceeds EUR 1000, or when a sequence of payments appears to be linked and the total exceeds EUR 1000, these additional information requirements would apply. In its proposal, the commission stated:
“In order to avoid impeding the efficiency of payment systems and crypto-asset transfer services, and to strike a balance between the risk of driving transactions underground as a result of overly stringent identification requirements and the potential terrorist threat posed by small transfers of funds,” says the report.
If a series of payments totaling more than EUR 1000 appear to be unrelated, the payment service provider is not required to verify the data unless it “effects the pay-out of the funds in cash or anonymous electronic money,” or “has reasonable grounds for suspecting money laundering or terrorist financing.”
The new standards were part of the European Commission’s four legislative proposals released on July 20. All of the ideas sought to improve the detection of suspicious transactions, as well as the prevention of money laundering and terrorism financing. The recommendations will be decided by the European Parliament, and it could take up to two years for them to become law.