On 16 May 2023, in addition to the MiCA Regulation, which establishes uniform regulation and rules for the issuance and trading of cryptoassets within the EU, the EU Council approved a regulation that has not received much media attention, but will undoubtedly affect the cryptoasset markets in a fundamental way. This is the recast regulation (EU) 2015/847, on information accompanying transfers of funds, which extends the requirements of the current Regulation to cryptoassets.
The adoption of this Regulation is one of the pillars of the European Commission’s Action Plan for a comprehensive European Union policy on the prevention of money laundering and terrorist financing, which aims in particular to harmonise the hitherto divergent approaches to the supervision of obliged persons and to strengthen cooperation between AML/CFT supervisors in the different Member States, including the creation of a new EU Anti-Money Laundering Authority (AMLA).
The original Regulation (EU) 2015/847, on information accompanying transfers of funds, aimed to ensure the traceability of transfers of funds by transmitting information on the payer and the payee throughout the payment chain. The recast Regulation then extends the obligations that originally applied only to transfers of funds, defined as banknotes, coins, non- cash money and electronic money, to transfers of crypto-assets.
Transfers of crypto-assets, which have until now been practically outside the scope of the legislation, will thus be subject to requirements of the same nature as transfers of funds. Cryptoasset service providers (CASPs), such as exchanges, money changers and crypto ATMs, involved in cryptoasset transfers will be required to accompany each cryptoasset transfer with information on the originator (i.e. the person who holds the account with the cryptoasset service provider and allows the transfer of cryptoassets from that account, or, in the absence of an account, the person who places the order for the transfer of cryptoassets) and the beneficiary (i.e. the person that is the intended recipient of the transfer of the cryptoassets), which will specifically include the name, account number of the originator, if used to process the transaction, address, official document number, identification number or date and place of birth of the originator and the name and account number of the beneficiary, if used to process the transaction, and retain this information for the relevant supervisory authorities for a period of 5 years.
The cryptoasset service provider on the beneficial owner’s side will then be required to establish effective procedures to monitor individual cryptoasset transfers and to determine whether the required originator and beneficial owner information accompanies the relevant cryptoasset transfer or was provided subsequent to the transfer. If such information or any of it is missing, the cryptoasset service provider on the beneficial owner’s side shall refuse to execute the cryptoasset transfer or request the missing information before making the cryptoassets available to the beneficial owner. In the event that, despite any warnings and the provision of additional time limits, the information is not provided even upon request or the originator-side cryptoasset service provider fails to repeatedly provide information about the originator or the beneficiary, the beneficiary-side cryptoasset service provider shall return the transferred cryptoassets to the originator or hold the cryptoassets until the competent supervisory authority has verified the transaction.
That Regulation does not then apply to person-to-person transfers of cryptoassets that are carried out without the involvement of a cryptoasset service provider (CASP). Member States may also decide not to apply this Regulation to transfers of cryptoassets as payment for goods or services where the value of the cryptoassets transferred does not exceed EUR 1 000.
