Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets

What it is

to extend the scope of Regulation 2015/847 on information accompanying transfers of funds to include transfers of crypto-assets made by Crypto-Asset Service Providers (CASPs). PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: until now, transfers of virtual assets, such as Bitcoins, have remained outside of the scope of EU legislation on financial services, exposing holders of crypto-assets to money laundering and financing of terrorism risks, as flows of illicit money can be done through transfers of crypto-assets and damage the integrity, stability and reputation of the financial sector. Money laundering, terrorist financing and organised crime remain significant problems which should be addressed at Union level. The European Parliament adopted by 529 votes to 29, with 14 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on information accompanying transfers of funds and certain crypto-assets (recast). The European Parliament's position adopted at first reading under the ordinary legislative procedure amends the Commission's proposal as follows: The aim of this recast is to introduce an obligation for crypto asset service providers to collect and make accessible certain information about the originator and the beneficiary of the transfers of crypto assets they operate. In order to ensure the transmission of information throughout the payment chain or the transfer of crypto-assets chain, the Regulation provides for a system imposing the obligation on payment service providers to accompany transfers of funds with information on the payer and the payee and the obligation on crypto-asset service providers to accompany transfers of crypto-assets with information on the originator and the beneficiary. This will ensure traceability of crypto-asset transfers in order to be able to better identify possible suspicious transactions and block them. The introduction of this ‘travel rule’ will ensure financial transparency on exchanges in crypto-assets and will provide the EU with a solid and proportional framework that complies with the most demanding international standards on the exchange of crypto-assets, in particular the recommendations of the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog. This Regulation should apply to transfers of funds, in any currency , which are sent or received by a payment service provider or an intermediary payment service provider established in the Union. It should also apply to transfers of crypto-assets, including transfers of crypto-assets executed by means of crypto-ATMs, where the crypto-asset service provider, or the intermediary crypto-asset service provider, of either the originator or the beneficiary has its registered office in the Union. This Regulation should not apply to a transfer of crypto-assets if any of the following conditions is met: (a) both the originator and the beneficiary are…

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