European Parliament

EU lawmakers push for stricter rules on anonymous crypto transfers

The legislation was one of several laws designed to combat money laundering and terrorist financing, receiving 99 votes in favor, eight votes against and six abstentions.

European Union lawmakers have adopted new draft legislation imposing a 1,000 euro ($1,083) cap on anonymous crypto transfers to combat money laundering and terrorist financing.

According to a European Parliament statement published on March 28, the limit would apply to a crypto asset transfer when a customer can’t be identified. Cash transactions will also be capped at 7,000 euros ($7,585). 

The Anti-Money Laundering and Countering the Financing of Terrorism package is set to be confirmed in a plenary session in April. After that, negotiations on the final shape of the bills will begin, it said.

It was noted that the European Anti-Money Laundering Authority (AMLA), formed in June 2022, would eventually enforce the rules.

“For us, it is important the new authority cooperates very closely with national supervisors and that it directly supervises the riskiest crypto asset service providers and companies in the financial sector that operate in several member states,” said Emil Radev, co-rapporteur for the AMLA.

The text relating to anonymous instruments, including crypto assets, was overwhelmingly approved by lawmakers, with 99 votes in favor, eight against and six abstentions.

The newly adopted text indicates that introducing the bill will require greater transparency and compliance, particularly from crypto asset managers. It noted:

“Entities, such as banks, assets and crypto assets managers, real and virtual estate agents and high-level professional football clubs, will be required to verify their customers’ identity, what they own and who controls the company.”

It was also noted that the industries would need to establish specific risks associated with money laundering and terrorist financing within their business area, and relay this relevant information to a centralized registry.

Related: European Commission to ensure ‘healthy competition’ in the metaverse

This comes after the European Banking Federation (EBF) released a paper on March 28, which detailed its vision for the digital money ecosystem of the future and the retail digital euro in particular.

The EBF proposed a three-tiered model for the digital euro: The European Central Bank’s (ECB) role and two industry levels. The ECB’s role will be to interact with the Single Euro Payments Area, with an “Industry Level B” subsequently developed and operated by the private sector.

In related news, the final vote on the European Union’s set of crypto rules — the Markets in Crypto-Assets regulation — was recently deferred to April 2023.

This is not the first time European lawmakers have rescheduled the procedure, having previously pushed it back from November 2022 to February 2023.

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Eva Kaili arrest a ‘setback’ for EU crypto regulations, economist says

European Parliamentarian Eva Kaili’s arrest under allegations of corruption is being labeled as a blow to crypto and blockchain adoption.

The arrest of European Parliamentarian and cryptocurrency proponent Eva Kaili has been labeled as a blow to the ecosystem by prominent blockchain industry participants.

Kaili, one of 14 European Parliament vice presidents, was arrested and charged on Dec. 10 by Belgian prosecutors who are investigating allegations of corruption, money laundering and criminal organization involving Qatar and senior policy-makers in Europe.

Belgian police reportedly seized 600,000 euros in cash as well as computers and cell phones belonging to Kaili and three other individuals involved in the probe. Kaili has since been suspended from the European Parliament, which she’s been a member of since 2014.

Kaili has been a vocal supporter of cryptocurrency and blockchain technology in the European Parliament and has played an important role in providing direction to the governing body’s approach to the sector in recent years.

Erwin Voloder, senior policy fellow at the European Blockchain Association, told Cointelegraph that the allegations against Kaili cannot be downplayed but admits that her arrest removes a much-needed voice to support the cryptocurrency space.

Voloder also highlighted Kaili’s role in leading the DLT Pilot Regime and 2016 Blockchain Resolution as well as her role as a shadow rapporteur, in which she lobbied to elevate blockchain technology during the 2020 InvestEU proposals.

Related: European Parliament members vote in favor of crypto and blockchain tax policies

Kaili also took the reins in an individual drive to explore nonfungible tokens (NFTs) within the purview of the European Union’s recently adopted Markets in Crypto-Assets (MiCA) regulations. Voloder said Kaili’s efforts to explore NFTs from a financial services and industrial application perspective were positive for the blockchain space.

Voloder went on to highlight what he observed as “negative and uninformed arguments” against blockchain and Web3 technology at the German Bundestag in mid-December. The economist believes this negative sentiment is pervasive across the continent:

“I think we have a similar problem at the EU level in that ideology can play an outsized role in driving how a certain technology or industry is perceived, especially in today’s hyper-partisan climate.”

Voloder also questioned whether macro-events in the cryptocurrency space, including the implosion of FTX, have played a role in branding the ecosystem as “industry non grata and guilty by association.”

Kaili’s expulsion from parliament leaves a gap for an equally vocal and passionate cryptocurrency proponent to drive regulatory exploration. Voloder did provide an optimistic take, referring to a recent workshop at the European Parliament that saw industry experts and commission officials presenting varying views on the sector.

Voloder also speculated that the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) could also take up the mantle in developing a framework for the NFT and decentralized finance sector.

Belgium says BTC, ETH and other decentralized coins are not securities

Belgium’s take on what conditions must be met in order for a crypto asset to be classed as a security are in contrast to the views of U.S. Securities Exchange Commission Chairman Gary Gensler.

Belgium’s financial regulatory body has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies that are issued solely by computer code do not constitute securities.

The explanation came from Belgium’s Financial Services and Markets Authority (FSMA) in a Nov. 22 report, a draft of which was opened for comment in July 2022.

The clarification comes following an increase in demands for answers as to how Belgium’s existing financial laws and regulations apply to digital assets, according to the FSMA.

While not legally binding under Belgium or European Union law, the FSMA stated that under its “stepwise plan,” cryptocurrencies would be classed as a security if it was issued by an individual or entity:”

“If there is no issuer, as in cases where instruments are created by a computer code and this is not done in execution of an agreement between issuer and investor (for example, Bitcoin or Ether), then in principle the Prospectus Regulation, the Prospectus Law and the MiFID rules of conduct do not apply.”

The Belgian regulatory body noted that cryptocurrencies which are not categorized as securities may still be subject to other regulations if a company uses the digital asset as a medium of exchange:

“Nevertheless, if the instruments have a payment or exchange function, other regulations may apply to the instruments or the persons who provide certain services relating to those instruments.”

FSMA also noted that its stepwise plan is neutral to the technology — suggesting that it’s irrelevant whether digital assets exist and are facilitated on a blockchain or through other traditional means.

The FSMA first drafted the report in July 2022 as a means to address frequently asked questions by Belgian-based issuers, offerers and service providers of digital assets.

FSMA stated that the stepwise plan would serve as a guideline until the European Parliament’s Markets in Crypto Assets Regulation (MiCA) is adopted, which is expected to take effect at the start of 2024.

Related: Not taking the time to learn about BTC is ‘Europe’s biggest risk,’ says Belgian MP

Belgium’s clear guidelines are in contrast to the “regulation by enforcement” approach taken by the U.S. Securities Exchange Commission (SEC), which is currently vying for digital asset regulatory control with the U.S. Commodity Futures Trading Commission (CFTC).

While SEC chairman Gary Gensler has long considered BTC to be a commodity, he’s recently argued that post-Merge Ether (ETH) and other staked coins may constitute a security under the Howey test.

Belgium hasn’t been a huge adopter of digital assets to date, with a recent study from blockchain data platform Chainalysis ranking Belgium 94th in its Global Crypto Adoption Index.

Residents in the European country have access to 10 crypto exchanges, according to data from crypto data resource Bitrawr.