- The European Union has finalized its regulations on cryptocurrency asset markets, to trace and identify cryptocurrency transfers.
- Crypto-asset service providers are now obligated entities under the Anti-Money Laundering Directive, including ATMs and transactions to and from the euro.
- Analysts predict that the price of Bitcoin could drop to $17,578 for the asset to collect liquidity.
With Bitcoin and Ethereum prices collapsing, the pressure to regulate cryptocurrencies was mounting on regulators around the world. The European Union said on Thursday it was seeking to agree on rules for regulating cryptocurrency assets and combating money laundering activities.
EU Rules Crypto, Traces All Crypto Transfers
European institutions have reached a tentative consensus on a set of European Union (EU) regulations that oblige cryptocurrency businesses to prevent money laundering and illicit activities. The EU has made progress with comprehensive regulation of the continent’s cryptocurrency market.
Negotiators representing the European Parliament, the Council and the Commission have reached a final compromise to strengthen regulation in the cryptocurrency sector, trace and identify all transfers and apply anti-money laundering (AML) directives to crypto service providers -assets.
Companies in the cryptocurrency industry are now required to verify the identity of their customers and report suspicious transactions. In the future, the European Transfer of Funds Regulation (ToFR) will cover cryptocurrency transactions.
The European Parliament and the Council of the EU have indicated that cryptocurrency businesses, exchanges, wallets, lenders, all service providers will have to assist financial authorities in their efforts to crack down on money laundering through of digital assets.
Ernest Urtasun, a Spanish Green Party lawmaker who was part of the EU process to regulate cryptocurrency, reportedly said:
The new rules will allow law enforcement officials to link certain transfers to criminal activity and identify the real person behind those transactions.
The new legislation will be closely aligned with the Crypto Asset Markets (MiCA) rules, alongside a focus on anti-money laundering initiatives.
Will EU cryptocurrency regulations dox owners of “non-hosted” wallets?
Crypto regulation covers “cold” wallets in addition to service providers such as exchanges, wallet services, and other platforms. An unhosted wallet is a crypto wallet held by individuals, not managed by a licensed platform. Rules regarding identification and tracking of cryptocurrency transfers will apply to transactions over €1,000 in fiat value.
Quinten Fracois, a leading crypto investor and YouTuber, criticized the EU decision and argued that
Hacks will occur with the collected data and people’s safety will be at risk. Non-hosted wallets ARE the innovation! Regulating it this way will destroy any innovation around it.
The EU has no idea what they are doing.
– Kill web3 innovation (after EU did the same with web2).
– Cryptocurrency exchanges and other businesses will never be able to implement all the rules.
– Hacks will occur with the collected data and the safety of people will be threatened.
— Quinten | 048.eth (@QuintenFrancois) June 30, 2022
Bitcoin and Ethereum prices are expected to fall further
The cryptocurrency market has not responded positively to increased regulatory scrutiny. Bitcoin and Ethereum prices have continued to fall and analysts believe there is room for further decline.
Akash Girimath, a leading crypto analyst at Netcost-Security, believes that Bitcoin price could drop to $17,578 to collect liquidity if the downtrend continues.
Bitcoin Perpetual Futures Chart
@FeraSY1, a crypto analyst and trader, thinks there is an “absence of sellers” rather than serious buyers. Therefore, it remains to be seen whether Bitcoin price will recover from the drop below $20,000.
Volume Shows It’s More of an “Absence of Sellers” Than Serious Buyers
Will be more than happy to see mass buyers come in, but that’s not “yet” pic.twitter.com/7y73bS9Og5
— Crypto Feras (won’t be DM first) (@FeraSY1) July 1, 2022
Netcost-Security analysts believe traders should approach Bitcoin price with caution, for this reason. Watch this video for more information: