The European Union (EU) Council has adopted a rule requiring cryptocurrency service providers to collect and transfer transaction data to tax authorities. The move reflects a global trend toward increased scrutiny and regulation of the cryptocurrency industry, but some users are not satisfied.
As countries around the world recognize the growing importance of digital currencies, policymakers are working to establish comprehensive frameworks to address potential risks and ensure financial stability.
The EU is particularly keen to “make it more difficult for criminals to circumvent anti-money laundering regulations via cryptocurrencies.”
“Today, the Council adopted updated rules on information accompanying funds transfers, thereby expanding the scope of coverage for cryptocurrency transfers.” said EU Council.
The EU stresses that these regulations are essential to prevent the misuse of crypto assets for criminal activity.
The Council has just adopted the first-ever EU regulation on the market for crypto assets and services.
The new regulations aim to improve transparency, maintain financial stability and strengthen consumer protection while fostering innovation. #Digital FinanceEU #mica
— EU Council (@EUCouncil) May 16, 2023
Also read: EU Reportedly Plans To Include NFTs And Foreign Companies In Crypto Tax
The EU claims that by implementing these measures it protects the financial system and adheres to strict anti-money laundering rules.
“Today’s decision is bad news for those who have misused crypto for illegal activities, to evade EU sanctions or to finance terrorism and war. is no longer possible and this is an important step forward in the fight against money laundering,” said Swedish Finance Minister Elisabeth Svantesson.
Under the new rules, crypto service providers will be required to collect and make accessible certain information about the senders and beneficiaries of crypto transfers, regardless of the amount of the transaction.
“This will ensure traceability of cryptocurrency transfers, allowing us to better identify and block potentially suspicious transactions,” said the EU Council.
On Twitter, the news sparked mixed reactions. Interestingly, the best response may have come from the AI-powered account ReplyGPT. I have written“The EU seems to want to ensure that cryptocurrency trading cannot remain anonymous and mysterious any longer. Who needs privacy?”
Tightening of AML regulations
The EU Council has adapted this legal framework to the package of legislative proposals presented by the European Commission on 20 July 2021 to strengthen the EU’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Regulations. defined as part of
“The package also includes a proposal to create a new EU authority to combat money laundering,” the EU Council statement said.
Its position on the Funds Transfer Proposal was agreed on December 1, 2021.
“Today’s formal adoption marks the final stage of the legislative process, according to the board,” the board said.
Is cryptocurrency trading gambling?
In the UK, the Finance Committee, made up of parliamentarians from various political parties, has released a report advocating classifying consumer transactions of “unbacked crypto assets” as gambling.
The report underscores the Commission’s contention that virtual currencies like Bitcoin have no intrinsic value and few tangible social benefits. According to its content, such currencies are frequently misused by criminals for fraud, fraud, money laundering and other illegal activities.
🪙 We have published a report on cryptoassets, outlining our recommendations for the government’s approach to regulating this market.
📗 Find out more and read the full report 👇https://t.co/CK7CVH2pQ1 pic.twitter.com/GvDQfiGhPU
— Finance Committee (@CommonsTreasury) May 16, 2023
The Commission has expressed concern about the significant risks posed to consumers from extreme price volatility and potential economic losses associated with these digital assets.
Given these concerns, lawmakers are urging the government to regulate consumer cryptocurrency trading as gambling, given its similarities to speculative gambling.
“Consumers should be aware that by betting on these unbacked ‘tokens’ they could lose all of their money.” Said Rep. Harriet Baldwin, Chairman of the Finance Committee.
Mona El Issa, DeFi Platform CEO and Founder avant-gardewas unimpressed with the Commission’s arguments.
“It is disappointing to see members of the Finance Committee using language and phrases related to cryptocurrencies that inevitably lead to sensational headlines and further misunderstandings about how digital assets and ecosystems work. It will be permanent,” she said.