24 April 2018

EC plans tougher AML rules for virtual currency exchanges

06 July 2016  |  7809 views  |  0 Bitcoin

Virtual currency exchanges and wallet providers will come under the scope of the European Union's Anti-Money Laundering Directive as part of a push to tackle terrorist financing.

After a surge in terrorist atrocities pushed the supply of funds to illicit organisations up the political agenda, in February the EC set out proposals to make amendments to the recently introduced Fourth Anti-Money Laundering Directive.

Among the changes which the Commission is adopting is bringing virtual currency exchange platforms and custodian wallet providers under the scope of the directive. These entities will have to apply customer due diligence controls when exchanging virtual for real currencies, ending anonymity.

Another amendment will see the threshold for identification needed for prepaid cards lowered from EUR250 to EUR150.

Alongside a tightening of checks on financial flows from countries with more lax controls, the EC is also proposing to widen the scope of information accessible by national and international 'Financial Intelligence Units'.

This will entail the creation of centralised national bank and payment account registers or central data retrieval systems in all Member States to provide intelligence agencies with easier and faster access to information on the holders of bank and payment accounts.

First vice-president Frans Timmermans says: "Today's proposals will help national authorities to track down people who hide their finances in order to commit crimes such as terrorism. Member States will be able to get and share vital information about who really owns companies or trusts, who is dealing in online currencies, and who is using prepaid cards."

The proposals still need to be approved by the EU Parliament and member states before they become law.

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