EU Parliament Votes for Closer Regulation of Cryptocurrencies

The European Parliament has backed a move to bring closer regulation to cryptocurrencies.

The parliament's members voted by a large majority on Thursday to support a December 2017 agreement with the European Council for measures aimed, in part, to prevent the use of cryptocurrencies in money laundering and terrorism financing.

The parliament members passed the move by 574 yes votes to 13 no votes, with 60 abstentions, according to a release.

The new legislation seeks to address the anonymity of the financial technology by implementing rules for cryptocurrency exchanges, platforms and wallet providers. Under the measures, such entities must be registered with authorities and will to have to apply due diligence procedures, including customer verification.

According to the release, the updated directive will come into force three days after publication in the Official Journal of the European Union. After that, member countries of the EU will have 18 months to bring the new rules into national law.

Member of the European Parliament (MEP) and co-rapporteur Krisjanis Karins said in the release:

“Criminal behaviour hasn’t changed. Criminals use anonymity to launder their illicit proceeds or finance terrorism. This legislation helps address the threats to our citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating virtual currencies and anonymous prepaid cards.”

Another co-rapporteur and MEP, Judith Sargentini, said that "billions of euros" are being lost every year to money laundering, terrorism financing and tax evasion and avoidance, adding that that money "should go to fund our hospitals, schools and infrastructure."

Sargentini continued:

"With this new legislation, we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence."

The European Council's December consensus agreement also proposed a range of new EU-wide penalties for those convicted of money laundering. The measure marked "an important milestone in the fight against organised crime at a European level," a rapporteur said at the time.

European Parliament building image via Shutterstock