European Union to Verify Cryptocurrency Traders
RegulationBit News Today2 min read
The European Union is moving to implement a new, wide-ranging system to identify and register cryptocurrency traders in all EU member states. The EU's anti-money laundering agency is planning to create a centralized database of all EU crypto traders.
Under the planned system, exchanges and other service providers would report users and their transactions to a registry maintained by the EU's Anti-Money Laundering and Counter-Terrrorism Financing Authority. ## Each trader to register with home regulator
Crypto traders would be required to register with regulators in their country of residence. Identities would be subject to a series of checks and approved or denied through national regulators, in a system similar to how money service businesses now register.
This is the EU's latest effort to establish the crypto industry as a financial sector to avoid the risk of cyber and money laundering. Previous efforts have included establishing surveillance requirements for crypto service providers and exchanges. ## Difficulties ahead
Given the volume of traders, the system could prove difficult to establish and manage even with the backing of the EU's top anti-money laundering agency.
"Without the necessary funding, expertise and oversight at the national or European level, there's a significant risk of the system being hollowed out and becoming ineffective," said Patrick Killian, blockchain expert at the University of Luxembourg.
Other experts worry that requiring registration across jurisdictions could deter some EU crypto traders or push the activity underground. ## Still getting used to the EU's role
Many crypto users across Europe are likely to only now be learning about their country's regulator's role in crypto oversight, or even the EU's role.
For those who don't know, the EU has taken a major role in crypto regulation, in part to give the European Central Bank space to develop its own digital currency.
The latest EU plans made public have some in the industry skeptical about whether national regulators in the EU have the resources and political will to enforce the new requirements, and to what extent the EU itself will back its plans.
"This is more formalizing their role a bit, but I'm not sure the EU has the teeth to crack down on this," said crypto compliance expert in Prague.
The top EU anti-money laundering authority in charge of executing the requirements has already been criticized by some in the EU parliament for being underfunded. The EU's financial police force, Europol, has previously cited a lack of cryptocurrency expertise and personnel. ## Conclusion
While the EU's new plans will add another layer of oversight over cryptocurrency trading, it remains to be seen how successfully these plans will work, given the many practical challenges and limited resources.
