EU Finalizes Cryptocurrency Regulation Law... Preventing Money Laundering

Cryptocurrency companies will now need official authorization to operate within the European Union (EU). Authorities will be able to track all cryptocurrency transactions and block any suspected illegal activities at the source.

The Council, composed of the 27 EU member states, confirmed on the 16th (local time) the implementation of the regulatory legislation called the "Markets in Crypto-Assets Regulation (MiCA)" to prevent money laundering and other abuses involving cryptocurrencies. This is the first time such a regulatory law aimed at preventing money laundering through cryptocurrencies has been enacted, and it is scheduled to be implemented gradually starting from July next year.

This legislation is a comprehensive regulatory framework that includes supervision of the highly volatile cryptocurrency market, consumer protection, and environmental safeguard measures.

Cryptocurrency companies will be required to obtain official authorization to operate within the EU, and they may face legal liability in the event of investor asset losses. Authorities will track transactions to prevent money laundering using cryptocurrencies and can block transactions suspected of being illegal at the source.

Disclosure of energy consumption information by key service providers will also be mandatory. Cryptocurrencies have been criticized for emitting carbon due to high electricity consumption during mining.

Additionally, as a follow-up measure after the implementation of MiCA, the EU plans to establish measures to prevent tax evasion using cryptocurrencies. According to the new guidelines, Crypto-Asset Service Providers (CASPs) within the EU must report all transaction details of customers residing within the EU, regardless of the scale of their business.