The European Parliament passed a preliminary legal framework for the crypto space on Monday that aims to increase standards and requirements for digital asset companies, ahead of a final vote expected soon.
See related article: Europe cancels AML amendment that would have forced identity verification for non-custodial wallets: report
- EU lawmakers voted heavily in favor of the legal text of both the Markets in Crypto Assets Regulation (MiCA) and the Transfer of Funds Regulation, the European Parliament Committee on Economic and Monetary Affairs announced in Monday statements.
- To curb crypto money laundering, the Transfer of Funds Regulation will require digital asset transfers through third parties to always be traceable, with the ability to block suspicious transactions.
- Similar laws apply to traditional financial transactions, with information on the source of the asset and its beneficiary stored on both sides of any given transfer. Upon request in an investigation, crypto asset service providers must share this information with authorities, with personal, non-custodial wallets exempted.
- MiCA, on the other hand, requires new obligations for crypto asset service providers, such as the need to publish an official “crypto-asset white paper” containing details about their offerings.
- The bill would also mandate that companies involved in crypto mining publicly disclose their energy consumption data in a prominent place on their website.
- Stablecoins were excluded from MiCA’s permissible digital asset trading standards, with the European Securities and Markets Authority given “sufficient powers” to supervise the issuance of stablecoins and other crypto assets.
See related article: How will the crypto tax debate play out in the UK?