New EU Directive on Money Laundering and What That Means for the Crypto World

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On 19 June, the European Parliament published a new anti-money laundering directive on the website of the Official Journal of the European Union. The document will oblige countries to tighten their cryptocurrencies and allow EU countries to better monitor cryptocurrency transactions and combat terrorism.

Numerous states around the world are striving to achieve better regulation of the cryptosphere in 2018. At the end of May, the GDPR came into force for the EU: A new law on the use of data obliging companies to inform users about how their information is being used. A citizen may even require changing or deleting data about him, which could be difficult on blockchain platforms.

Blockchain makes transactions more transparent, but the identity of its members is difficult to identify. This is also known to be used by various terrorist groups for whom anonymity is important. The new directive is aimed at tracking cryptocurrency transactions, because terrorists often use virtual tokens in their activities, and exchanges do not track those transactions. According to various regulators, a state should have mechanisms for monitoring cryptocurrencies and providers should provide information if law enforcement agencies so request.

Directive 2018/849 was adopted by the European legislators in April 2018. The document replaces the previous regulation, which was put into effect in 2015 by the European Parliament. Under the new rules, authorities can request information from Exchanges about the transactions on their platform. Using this data, a controller can associate the public currency addresses with its owners. “Such an observation will ensure a balanced and proportionate approach to protect technological achievements and the high level of transparency in the field of alternative financing and social entrepreneurship,” write the authors of the directive. The document gives the states of the European Union until January 2020 to make corresponding changes to their laws.

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