14 DAY TRIAL // European authorities are getting closer to implementing their plan to ban anonymous Bitcoin transactions after the Juncker Commission has adopted a proposal to broaden anti-money laundering rules in the EU.
Barely had two weeks passed after the ISIS attacks in Paris last November that several EU ministers met in Brussels, Belgium, to discuss a plan to regulate Bitcoin.
EU used the ISIS attacks in Paris to get the ball rolling
The EU's focus on Bitcoin came at the same time as several sources, which later proved to be false, said that ISIS terrorists used Bitcoin to move funds across the borders and finance their attacks on Paris.
While it was true that ISIS was in control of a large Bitcoin fund, it was never proven that the Paris terrorists used Bitcoin to fund that specific operation.
Nevertheless, the EU took advantage of the sway in public opinion at that time to set a plan in motion to finally regulate Bitcoin transactions in the region.
Action plan proposed in February gets the thumbs up
Three months later, in February 2016, the European Commission put forward an action plan to update its Anti-Money Laundering Directive (AMLD) so that it would specifically mention crypto and digital currencies in its text.
Specifying these terms in the AMLD directive implies that Bitcoin traders would be forced to follow all the legal procedures that banks and other financial procedures adopt to prevent money laundering operations.
These procedures require gathering enough information on the people involved in a digital currency transaction that would effectively end the anonymity surrounding such operations. The proposal's specific text regarding crypto-currencies is as follows:
“ Tackling terrorist financing risks linked to virtual currencies: to prevent misuse of virtual currencies for money laundering and terrorist financing purposes, the Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive. These entities will have to apply customer due diligence controls when exchanging virtual for real currencies, ending the anonymity associated with such exchanges. ”
Additionally, the same action plan also wants to end the anonymity surrounding the purchase of pre-paid cards across Europe, for which users will now need to provide ID verification.These proposals were adopted this week, on July 5, when the Juncker Commission voted favorably on the action plan, which will now enter in the normal flow of the European Parliament's ordinary legislative procedure and be approved later this year, becoming an official amendment to the AMLD, applicable across EU member states.