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  • Reuters

EU will make Bitcoin traceable and ban anonymous crypto wallets in anti-money laundering drive

Cryptocurrency exchanges could be forced to collect the details of people sending and receiving crypto under new rules proposed by the European Commission.

The EU's executive branch announced the potential change on Tuesday as part of a package of reforms aimed at tackling financial crime within the bloc.

"The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system," the Commission said in a statement.

The new law would establish a new EU-wide anti-money laundering authority (AMLA) with oversight of cryptocurrencies by 2023.

How would this affect cryptocurrency trading?

Some crypto-asset service providers are already covered by the EU's anti-money laundering and terrorism funding rules.

The proposed law would apply these rules to the entire crypto sector, forcing service providers like crypto exchanges to carry out due diligence on their users.

This would bring crypto-assets in line with bank transfers, applying what is known as the Travel Rule to crypto transactions to make them traceable.

"These proposals have been designed to find the right balance between addressing these threats and complying with international standards while not creating excessive regulatory burden on the industry," the European Commission said.

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