TL; DR Breakdown
- Cryptocurrency sector still reeling from European parliament votes
- Crypto exchange providers to be held accountable to provide data on the unhosted wallet
Attendees at the Paris Blockchain Week Summit learned Wednesday that the cryptocurrency sector is still reeling from a series of votes in the European Parliament that some said might be regulatory overkill.
The EU’s plans to reduce the energy consumption of proof-of-work technology – which some feared might amount to a bitcoin ban – were defeated in March when voted on in the European Parliament. However, a second, equally contentious anti-money laundering measure did pass, and it could become legislation if governments sign up.
Under planned banking regulations referred to as the Travel Rule, parties involved in crypto transactions would have to identify each other. EU lawmakers want that requirement to apply even for tiny payments or those made to private individuals rather than regulated exchanges.
Assita Kanko, a lead lawmaker, urged that the travel rule would aid in doing away with crime, bringing more people into the sector.
“If the banking sector, which is seen by many in the crypto space as stuffy and outdated, can survive the travel restriction… Why couldn’t fashionable, cool crypto people? They could figure it out. I suppose I’m encouraging them to give it a shot.” she added shortly after her committee approved the measure on March 31.
Crypto exchange providers to be held accountable for providing data on the unhosted wallet
The regulation gives the crypto exchange provider control over information flow, allowing them to be held accountable for providing efficient data if they discover an unhosted wallet. Hedi Navazan, head of compliance for Crystal Blockchain, told attendees Wednesday.
The financial intelligent unit has the mandate to gather laundering cases suspects with information known as suspicious activity report, she added.
The Law Commission in the United Kingdom said in June 2019 that “too many low-quality” laundering reports were being sent to authorities, “undermining the integrity of the entire procedure.” Even the European Banking Authority, Europe’s own regulatory body, has complained about a “tick-box” method, in which financial institutions simply follow procedures rather than identifying.