EU Bans Suspicious Digital Wallets While Proposing Legislature for Digitization of Crypto Transactions

Cryptocurrency News

For keeping an eye primarily on Bitcoin and other virtual assets, the EU has carved a plan of enacting a legislature for ensuring check and balance upon crypto transactions. EU is of the view that the proposed legislation will enable the regulators to trace end-to-end virtual assets’ transactions and keep records of them through digitization. The legislation will be essential for preventing activities of money laundering, misuse of crypto, and terror funding. While announcing the proposal EU has also banned digital wallets whose beneficiaries were either unknown or suspicious.

On 20th July 2021, the EU has announced the introduction of new legislatures regarding virtual assets and their transactions. The aim of the legislatures in the words of the EU was to strengthen the regional regulator’s check on balance upon crypto transactions. EU’s primary objective of proposing the legislatures is to control the activities of money laundering, terror funding, and misuse of crypto.

The first legislation proposal relates to an amendment that has been proposed to be incorporated in the Regulations on Transfer of Funds, 2015. The law, in its present form, deals with the tracing of both ways transactions in respect of virtual assets. However, according to the EU, the provisions of the law are ambiguous and need revision and amendments. It has been proposed that adding further provisions will ensure check and balance upon the transactions of virtual assets.

As regards the proposed law, it was revealed that the law will consider any and all challenges emerging out of technology and innovation.

Most importantly, the law also talks about developing an Anti-Money Laundering Authority within the Euro Zone. It was proposed that the proposed authority will be the central authority. The national authorities of each member state will then report directly to the central authority and carry out functions according to its instructions. Any guidelines, rules, or regulations issued by the central authority will be applicable to each member state. On the other hand, the national authorities will be responsible for ensuring compliance with the central authority’s guidelines, rules, and regulations.

In the meanwhile, the EU has asked each member state to instruct their respective authorities to present their recommendations in writing. The data collected from the national authorities will then be incorporated in the proposed legislature, claimed EU.

Meanwhile, the EU stated that the legislation is going to be the ultimate source of preventing illegal use of crypto. The proposed amendments will enable national authorities to trace end-to-end crypto transactions, particularly Bitcoin transactions. Each and every crypto transaction will be duly digitized in a common register which will be updated on daily basis and shared with the central authority.

While announcing the proposed legislation, the EU also confirmed that unknown beneficiaries’ digital wallets and suspicious wallets will be banned.

It is expected that the central AML authority will be fully functional by the year 2024.

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