European lawmakers have finally agreed on crypto regulating rules.
OneArt posts the highlights of the breakdown by Chainalysis regarding the so-called “Travel Rule.”
📍TFR, or Transfer of Funds Regulation, defines two key points:
- The value above which transfers become subject to the rules
- How the rules are applied to unhosted wallets.
📍Crypto businesses will have to capture data about the sender and recipient identity regardless of the transaction size.
📍The €1,000 threshold for transfers involving a user’s own unhosted wallet. Transactions of more than €1,000 will need verification of the ownership of the wallet.
📍Businesses will have to collect data about the unhosted wallet if it’s a 3rd-party one. Moreover, before the transfer, they’ll have to assess the AML/CTF risk and apply risk-mitigating measures. More details on the requirements coming later.
❗️So, unless a user is identified as the unhosted wallet owner, the business has to assess the risk prior to transferring the funds.
The EU still has to hammer out details, as the rules will come into effect in the European Union within 1,5 years. It’s the first time the EU brings crypto under a regulatory framework to try to resolve at least some of the legal issues behind cryptocurrencies. These requirements may become a benchmark for lawmakers in other regions.
Part 2 of the breakdown coming next week. Stay tuned for more information!
