BRUSSELS, Belgium—Officials at the European Commission, the European Union's executive branch, have made public draft legislation that would seek to apply the FATF's so-called “travel rule” for crypto assets.
The EU has for months been solidifying its stance on regulating various aspects of the crypto industry, including rules around stablecoin oversight, according to The Block. With the legislation, the E.U. is setting the stage for closer supervision of crypto asset transactions as part of a broader overhaul of anti-money laundering/know-your-customer rules. Still, any changes are subject to deliberation in the European Parliament and will likely take years to go into effect, The Block reported.
The draft text states: "The proposal extends the scope of Regulation 2015/847 to include transfers of crypto-assets made by Crypto-Asset Service Providers (CASPs) in addition to the current provisions on transfer of funds. It aims at reflecting in EU law amendments made in June 2019 to Financial Action Task Force (FATF) Recommendation on new technologies to cover ‘virtual assets’ and ‘virtual asset service providers’, and in particular new information obligations for the originator and beneficiary CASPs at the two ends of a crypto-assets transfer (the so-called ‘travel rule’)."
Under the rule, so-called virtual asset service providers, or VASPs, must share information about the senders and recipients involved in VASP-to-VASP transactions larger than $1,000. The E.U. refers to these entities as crypto asset service providers, or CASPS, The Block explained.