Insights European Parliament adopts position on draft legislation to strengthen EU rules against money laundering and terrorist financing, including in relation to cryptoassets


MEPs from the Committee on Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties (LIBE) have adopted their position on draft legislation strengthening EU rules against money laundering and terrorist financing.

Under the draft legislation, all transfers of cryptoassets would have to include information on the source of the asset and its beneficiary and be made available to the competent authorities. The rules will also cover transactions from so-called unhosted wallets (a cryptoasset wallet address owned by a private user). Technological solutions should ensure that these asset transfers can be individually identified.

The aim is to ensure that crypto transfers can be traced, and suspicious transactions blocked. The rules would not apply to person-to-person transfers conducted without a provider, such as bitcoin trading platforms, or amongst providers acting on their own behalf.

Due to their speed and virtual nature, cryptoasset transactions can easily circumvent existing rules based on transaction thresholds. The legislation removes minimum thresholds and exemptions for low-value transfers.

The draft legislation also states that the European Banking Authority (EBA) would create a public register of businesses and services involved in cryptoassets that may have a high risk of money-laundering, terrorist financing and other criminal activities, including a non-exhaustive list of non-compliant providers.

Before making cryptoassets available to beneficiaries, providers would have to verify that the source of the asset is not subject to restrictive measures and that there are no risks of money laundering or terrorism financing.

The adopted text represents the draft mandate for MEPs to negotiate the final shape of the legislation with EU governments. The European Parliament should vote on it during the plenary session in April 2022. To read the European Parliament’s press release in full, click here.