European Banking Authority official urged EU lawmakers to rethink crypto.
The regulatory official stressed that the EU’s new proposals to monitor crypto with unhosted wallets may violate the risk-based approach set by international money laundering regulators.
Politicians at the European Commission also warned that the decision to lift the 1,000-euro limit to identify crypto transfers should be backed up by concrete evidence.
The European Parliament voted on March 31 through controversial provisions to identify participants in crypto payments, including transactions related to unhosted wallets by any regulated exchange. Industry leaders have warned that this could hinder innovation and reduce privacy.
Joana Neto of the European Banking Authority stated at an event of the European Parliament in Brussels that it can be very difficult to require automatic notification of large transactions, especially with unhosted wallets, to the authorities.
Neto, an anti-money laundering data specialist, said there will be a lot of workload and he wonders who will take care of it. She said that although the obligation to report missing data to the authorities is great in theory, it can be a problem in practice.
MEPs also supported governments to lift the current €1,000 threshold for traditional bank transfers. This means that even if crypto payments have a small value, participants must be identified.
On the subject, some lawyers said that such an approach could pose legal challenges due to privacy concerns. For this reason, officials stated that the approach should be justified by lawmakers and governments.
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