Providing user information will no longer be optional for European exchanges
Along with the second part of the Market in Crypto-Assets Regulation (MiCA), another series of measures against money laundering and the financing of terrorism (AML/CFT) will come into force on December 30 in the European Union (EU).
These are the new guidelines for the application of the “Travel Rule”«. A set of rules that bitcoin (BTC) and other cryptocurrency exchanges – legally identified as service providers or CASPs – now have to follow. must be implemented compulsorily. This, following the new guidelines of the European Banking Authority (EBA).
As the agency announced on its official website, under this regulation the platforms that carry out operations with cryptocurrencies now They will have to collect information from usersidentify whether your transactions are related to the purchase of legal goods or services and track the transfers to which they are linked.
Additionally, they will have to declare their policies for intermediation and cross-border transfers. The objective is to detect any activity that may appear to be illicit.
This is a regulation included in the recommendations of the Financial Action Task Force (FATF) that requires exchanges to share information about their clients, although it has been highly questioned within the cryptocurrency ecosystem. for its privacy implications.
The guidelines are already generally included within MiCA, so the function of this new package is to reaffirm the approved rules and set out the guidelines to follow for their application. This eliminates the optional range that the “Travel Rule” had.
As explained in the document published by ABE, once the regulation comes into force, cryptocurrency platforms will have for a period of two months to declare their adherence to the new requirements. This will be a transitional period intended to facilitate compliance with the standards.
EBA admits difficulties in compliance
At some point in its document, the EBA admits that compliance with the EU guidance on the Travel Rule will subject exchanges to new financial strainsHowever, they expect the effort will pay off in the long term.
“The benefits of these guidelines are expected to outweigh the potential costs, and these guidelines are expected to contribute to making the fight against AML/CFT more effective,” the agency said.
It should be noted that the regulations come into force together with the second block of MiCA, aimed at regulating service providers with crypto assets. A situation imposes on these companies the fulfillment of more requirements, including the request for a license in one of the 27 EU countries to be able to continue operating in the region.
They must also implement security plans, rules to prevent market abuse and anti-money laundering measures. All this together with information on their ownership structure, corporate governance and risk management procedures.
Faced with such demands, it is known that there are a large number of companies that have difficulty adjusting to standards.
As CriptoNoticias reported, many platforms are not yet prepared to comply with MiCA. And even though there are only 6 months left until it comes into force, 70% do not have the systems for market and user surveillance required by the Regulation.
In that sense, HE notes the existence of much uncertainty for the application of the law. This has been the case both in the first phase of the regulation that came into force on June 30 (dedicated to stablecoins), and for the phase that will be implemented in December with bitcoin exchanges.
