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There are many indications that a new EU regulation will soon enter into force, which will support activities aimed at laundering money in cryptocurrencies. The MiCA directive does not seem to guarantee sufficient safety in this area.
Safe cryptocurrency trading
In March, the European Parliament approved the MiCA regulation, which is to be the first regulation of the EU cryptocurrency market. Although it is still difficult to assess how this document will work in practice, further actions are already planned to counteract the criminal use of cryptocurrencies.
The European Parliament, in cooperation with the European Council, has developed a bill to increase the security of digital money transactions. This act is to ensure the possibility of tracking cryptocurrency transfers and blocking transactions that raise doubts. This law would complement the MiCA Directive, which devotes too little attention to safety issues.
Principle "travel rule"
The activities carried out at the EU level, in accordance with the official position of the European Parliament, are intended to transfer the principle known as the "travel rule" applicable in traditional finance, also to cryptocurrency transfers. It states that information about the sources of the asset and its beneficiary will "travel" with the transaction and will be stored on each party to the transfer. Cryptocurrency service providers will be required to make this data available to the relevant services in the event of any irregularities related to the financial turnover.
Counteracting financial crimes in Europe
It also seems justified that the regulation should also cover the so-called unhosted wallets, meaning those wallets that are not related to traditional centralized exchanges or brokers. It is worth adding that such a postulate was rejected some time ago by the British authorities, not allowing the tracking of these wallets.
Meanwhile, the new EU regulation governing the transfer of funds is aimed at implementing the relevant requirements on cryptocurrency transfers. At the same time, entities offering related services will be obliged to collect and share their clients' data, if necessary.
All these activities are intended to make cryptocurrency transactions more secure, and at the same time to reduce the scale of fraud and money laundering.
