The European Parliament (EP) brings measures in place to mitigate the risks associated with cryptocurrency usage.
Members of EP voted 574 votes to 13 votes with 60 abstentions, in favor of a previous agreement that asked for closer regulation for virtual currencies. This has a goal to prevent them being used for Money Laundering and terrorism financing.
Under the agreement, cryptocurrency exchanges and wallet providers should provide customer diligence controls, including customer verification requirements. This is similar to how banks do to control the flow of Money.
The nature of cryptocurrencies and their anonymity, is associated with bad actors. With regulations, EP believes it will help end digital coins elicit uses.
The measures are also being taken partly because of the terrorist attacks in Paris and Brussels as well as the Panama Papers leaks.
With the regulations that are harsher and more strict, Europe is aiming for a larger goal of eliminating money laundering in general. This agreement also calls for regulations against anonymous prepaid cards, greater protection for whistleblowers and making the identity information of beneficial owners of companies operating in the EU public.
According to the report, money laundering wastes billions of dollars, where those dollars should go to fund hospitals, schools and infrastructures. Instead, they are used for tax evasions as well as Terrorism Funding.
"With this new legislation, we introduce tougher measures, widening the duty of financial entities to undertake customer due diligence. This will shine a light on those who hide behind companies and trusts and keep our financial systems clean. These rules will also be of enormous benefit to developing countries and their fight against illicit outflows of money which is desperately needed for investment in their own societies."
The measures won't only help EU, but also developing nations where the fights against black money is more difficult.