The European Parliament’s Committee on Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties (LIBE) will vote on Thursday 31 March on their position regarding the revision of the Transfer of Funds Directive to include crypto-assets.
“The idea is to integrate this new economic reality into the ‘anti-money laundering’ package”, explained MEP Aurore Lalucq (S&D, France) to EUROPE on Wednesday 30 March. “Our goal is not to kill off the cryptocurrency market, but to integrate it with already existing standards”, she argued.
This directive is separate from the directive aimed at defining a uniform legal framework for crypto-assets in the EU (MiCA) (see EUROPE 12913/28), since it deals exclusively with fund transfers. The proposal, which was initiated by the European Commission in July 2021, wants customers who are using cryptocurrency to be made identifiable so that the money can be prevented from being used to fund illegal activities such as terrorism or paedophilia (see EUROPE 12917/25).
“When you want to invest, showing your ID card is not going to deter you from doing so. Many crypto-asset key players have no issue with the fact that their clients investing in cryptocurrency can be identified. KYC (know your customer – a protocol for verifying the identity of a customer) is not a taboo”, argued Ms Lalucq.
To this end, parliamentarians have proposed three major amendments: - set a threshold of zero for identifying transactions; - establish a blacklist of those digital asset service providers (DASPs) who do not comply with the rules; - establish automatic reporting to the competent authorities for all transfers over 1000 euros made by DASPs from ‘unhosted wallets’. As a result of these measures, elected representatives hope to limit the practice of transferring multiple small amounts of money that fall below the required legal limit in an effort to get around the law (known as ‘smurfing’).
Ms Lalucq praised the work of the co-rapporteurs – Ernest Urtasun (Greens/EFA, Spain) on behalf of the ECON Committee and Assita Kanko (ECR, Belgium) on behalf of the LIBE Committee. “We hope that the compromise over ‘unhosted wallets’ will be adopted; it would send a good sign to demonstrate that the European Parliament has done some serious work on this technical issue”, said the MEP, fearing nevertheless that the EPP and ID groups would reject it.
If voted through, the text will then go to trilogue negotiations on Thursday 28 April and Tuesday 7 June.
The Council of the EU had decided on its negotiating position by the end of 2021 (see EUROPE 12845/25).
To read the compromise proposal: https://aeur.eu/f/11f (Original version in French by Anne Damiani)