On February 9, two main factions of the European Parliament proposed a policy framework that would apply current legislation aimed at countering money laundering and terrorist funding to all crypto transactions. Assita Kanko (European Conservatives and Reformists) of Belgium and Ernest Urtasun (Greens–European Free Alliance) of Spain sponsored the proposal.
The current version of the “travel rule” requires banks and payment providers to keep information that “travels” between payers and receivers for many years and make it accessible to authorities. The policy is only triggered when a transaction surpasses the 1,000 euro threshold.
Some have argued that the regulatory framework is too similar to the official advice of the Financial Action Task Force (FATF), an international body formed by the G7 group of states to combat money laundering and terrorist funding.
Kanko and Urtasun recommend lowering the threshold for cryptocurrency transfers, thereby forcing exchanges and wallet providers to record “travel information” for each and every transfer. European authorities would acquire the sender and recipient’s names, home addresses, passport numbers, and wallet addresses for both the sender and the recipient.
The roadmap also proposes the creation of a white list of cryptocurrency exchanges that have successfully established acceptable KYC processes for consumers. They may be spared from having to document each and every transaction. Kanko particularly cited Binance as a cryptocurrency exchange that might potentially be included in the white list.
The proposed rule has aroused discussion in the European crypto sector. Key European stakeholders are often sympathetic to and nonchalant about legislation being drafted in Brussels. However, the substantial extension of the “travel rule” has company owners concerned about the possibility of restricting the region’s competitiveness.