Investing.com – The European Union wants to strengthen the fight against money laundering and has targeted crypto exchanges for this purpose.
If the European Parliament approves the elaborate bill, crypto exchanges such as Coinbase (NASDAQ:) and others will have to deal with a considerable increase in bureaucracy.
The law requires that both the sender and receiver of a transaction be known, as Blockworks reported. In practice, this would mean that the client of a crypto exchange must indicate who is behind the wallet address for a transaction made outside of this platform. In order to prevent attempts at fraud, the cryptocurrency exchange is required to verify the veracity of the data provided.
This would inevitably result in two things. On the one hand, a transaction of digital assets within seconds would be almost impossible and, on the other hand, it could be that crypto exchanges prohibit such transactions in principle in order to avoid the extra work.
Amendment 124, section 29(2a), states the following in the bill:
“In the event of a transfer of crypto-assets from a distributed ledger address not associated with a crypto-asset service provider, known as an ‘unhosted wallet’, the crypto-asset service provider of the beneficiary should be required to collect information about the originator and the beneficiary”.
Coinbase Chief Legal Officer Paul Grewal said: “Another provision, for example, provides that exchanges must not only collect personal data about users of wallets who are not their customers, but also verify the accuracy of this data. before authorizing a transfer from one of their clients”.
For transactions to a non-hosted wallet that exceed the amount of 1,000 euros, a money laundering declaration must even be made to the competent AML authority. And this whether or not there is a suspicion of money laundering.
If this were to happen, the scope of activity of central crypto exchanges would have to be significantly reduced. The beneficiaries would be the decentralized exchanges (DEX), which are not subject to any regulatory constraint.
By Marco Oehrl
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