📣 EU Tightens Cryptocurrency Regulations
posted 30 Dec 2024
Starting December 30, 2024, European virtual asset service providers (VASPs)—including crypto exchanges, trading platforms, and centralized wallets—must comply with the Travel Rule. This regulation is aimed at bolstering anti-money laundering (AML) and counter-terrorism financing (CTF) measures.
Starting December 30, 2024, European virtual asset service providers (VASPs)—including crypto exchanges, trading platforms, and centralized wallets—must comply with the Travel Rule. This regulation is aimed at bolstering anti-money laundering (AML) and counter-terrorism financing (CTF) measures. Under this regulation, companies must collect and transmit information about the sender and recipient of each transaction.
Key Points of the Travel Rule:
- No minimum threshold: Unlike traditional financial transfers, which are tracked starting at €1,000, the Travel Rule applies to all crypto transactions, regardless of amount.
- Ownership verification: Users transferring assets to non-custodial wallets must verify ownership of the wallet.
- Enhanced checks for large transactions: For transfers exceeding €1,000, platforms may request additional user information.
The European Banking Authority (EBA) stated that implementing the Travel Rule will improve the transparency of digital asset transactions and strengthen the financial system's security. While acknowledging the potential for significant short-term financial costs, the regulator argues that all stakeholders will benefit in the long run.
However, many cryptocurrency users and industry professionals disagree. They claim that such regulations complicate operations for companies, substantially increase costs, and drive businesses away from the European market. Additionally, stricter regulations could lead to an exodus of crypto companies from the European Union.
This new requirement also comes amidst the potential delisting of the Tether stablecoin (USDT) from European exchanges and a shift in the U.S., where political pressure on the crypto industry is easing. With President Donald Trump and pro-crypto Senate and Congress advocating for significant deregulation, the U.S. is working to make its market more attractive for crypto businesses.
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