For long, money laundering has been linked to terrorism and other numerous criminal activities. This time around, the European Union is taking steps to introduce stricter measures to stem the vice.

However, this move is also likely to impact the crypto world as the new law seeks to dig up more information about the people behind money transfers, most especially those cashing digital assets into fiat currencies.

The new EU legislation goes by the title “Fifth Anti-Money Laundering Directive,” and its main proposal is to institute a broader scope in managing how state bodies share important information, especially with regard to money transfers and cash outs. To this effect, the legislation will focus more on taxable activities due to their possible links to crime and terrorist funding schemes.

The new laws have primarily been informed by the recent terror attacks in Belgium, France, as well as other European countries, coupled with reports of money laundering rings connected to criminal activities and tax havens. The laws are meant to prevent the financial system from being used to fuel such crimes that present a potent threat to European citizens.

Since the new legislation allows broader access of information by the state, firms operating within the EU are now required to collect and share user information with the state in a bid to ensure that such companies don’t get involved as accomplices to tax havens or leaks as happened with the Panama leaks.

Among the entities obliged to collect and store user data include those operating in real estate, gambling, financial institutions, and other related professionals.

As such, crypto service providers like exchanges also fall in this category, meaning that crypto investors will now be required to provide more personal and verifiable information when opening wallets or conducting crypto transactions.

Although these service providers have made efforts to put in place their own measures to know their customers more, the move to ratify the new law makes it mandatory for them to facilitate it more strictly.

The logic in this move is that despite the fact that the relative anonymity accorded to crypto investors isn’t necessarily the cause of the mentioned criminal activities, it plays a part in facilitating them. On the bright side, the move might as well work boost confidence in cryptocurrencies as bad actors are dealt with. This could motivate more investments and ultimately drive up crypto values.

The post Crypto Investors Are Not Left Untouched By The New EU Laws Meant To Stem Money Laundering appeared first on ZyCrypto.

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