EU lawmakers back new tracing rule for crypto transfers

channelnewsasia.com:

LONDON: European Union lawmakers backed new safeguards for tracing transfers of bitcoin and other cryptocurrencies on Thursday (Mar 31), in the latest sign that regulators are tightening up on the freewheeling sector.Two committees in the European Parliament jointly voted by 93 in favour and 14 against on cross-party compromises which crypto exchange Coinbase Global Inc warned would usher in a surveillance regime that stifles innovation.The US$2.1 trillion crypto sector is still subject to patchy regulation across the world.Under the draft law first put forward last year by the EU's executive European Commission, crypto firms such as exchanges would have to obtain, hold, and submit information on those involved in transfers.That would make is easier to identify and report suspicious transactions, freeze digital assets, and discourage high-risk transactions, said Ernest Urtasun, a Spanish Green Party lawmaker helping to steer the measure through the parliament.Currently there are no EU requirements for tracing crypto transfers and the Commission had proposed applying the new rule to transfers worth €1,000 (US$1,116) or more, but lawmakers on Thursday voted to scrap the 'de minimis' threshold, meaning all transfers would be in scope.Urtasun said removing the threshold brought the draft law into line with rules from the global Financial Action Task Force that sets standards for combating money laundering.

Those rules mean crypto firms must collect and share data on transactions.The lawmakers' committees also backed putting transfers from 'unhosted' crypto wallets held by individuals, not exchanges, under the tracing rule, and on the creation of a list by the EU's European Banking Authority of high-risk or non-compliant