The European Parliament has approved the first-ever EU legislation for tracking crypto-asset transfers, aiming to deter money laundering and establish standard supervision and consumer protection guidelines. Crypto transfers will now be subject to the “travel rule,” mandating transaction information, including the source and recipient of the asset, be documented and stored on both ends of the transfer. Transactions over €1000 involving self-hosted wallets interacting with hosted wallets overseen by crypto-asset service providers will also be affected. The Parliament has also approved common rules concerning the supervision, protection of consumers, and environmental safeguards of crypto-assets under the MiCA framework, covering crypto-assets not regulated by existing financial services laws. The legislation includes specific measures to combat money laundering and other illicit or criminal activities, with the European Securities and Markets Authority creating a public register of non-compliant crypto-asset service providers operating within the EU without proper authorization. Major service providers must also disclose their energy consumption to address the “high carbon footprint” of cryptocurrencies. The legislation will now proceed to the Council for formal endorsement before being published in the EU Official Journal and entering into force 20 days later.

(By Siamak Masnavi)