The crypto sector is finally coming under the radar with the European Parliament favoring stricter regulations for the wallet providers and crypto exchanges. And it is high time that such measures are taken as the cybercriminals including terrorists have already exploited and looted the crypto platform badly.

According to the new regulations, the wallet providers as well as the crypto exchanges will have to conduct a regular verification procedure prior to accepting a user on their platform. The process will include multiple diligence procedures including verification of identity. The European Parliament has made it mandatory for the platforms to registers themselves to become eligible for offering their respective services. The new measures are a part of the recently released EU Anti-Money Laundering Directive.

Regulations Aimed To Address Crimes Linked With Cryptocurrencies

The new regulation forwarded by the European Parliament was in support of an agreement that was already made by the European Council in December 2017. The decision received support from 574 votes with 13 members voting against the move while 60 members abstained from voting. The primary aim of these amendments is to put a brake to the crimes linked with virtual currencies.

According to European officials, the measure is partly being introduced in response to the 2015 and 2016 terrorist attacks in Paris and Brussels respectively as well as in response to the Panama Papers leaks. According to Krisjanis Karins, the co-rapporteurs on the amendments, the criminals take advantage of the anonymity for laundering illicit proceeds and also to get funds for terrorism. He believes that the new regulations will help to cut down the threats to common citizens as the rules tighten for virtual currencies and prepaid cards. 

A colleague of Karins, Judith Sargentini opined that countries lose billions of Euros through money laundering, tax evasion, and terrorism financing. Instead, he believes all this fund should go to hospitals, infrastructure, and schools. Introducing tougher measures will help the governments to track those companies that hide and break the trust.

The blockchain analysis startup company Elliptic and Center on Sanctions and Illicit Finance recently studied the way criminals are exploiting the cryptocurrency platforms and found out that there has been fivefold rise in the number of large scale criminal operations performed on the blockchain-based platforms between 2013 and 2016.