On April 20, the European Parliament announced the first initiative to regulate the tracing of crypto-asset transfers.

The Proposal for the recast of Regulation EU 2015/847 expanding traceability requirements to crypto-assets (the “Legislative Proposal”) forms part of the European Commission Action Plan for a sound and comprehensive EU legal framework to tackle money laundering and terrorist financing.

Key provisions of the Legislative Proposal includes:

1/ Obligations on the payment service provider of the payer (i.e. information accompanying transfers of funds; transfers of funds within the Union and transfers of funds to outside the Union).

2/ Obligations on the payment service provider of the payee (i.e. detection of missing information on the payer or the payee; transfers of funds with missing or incomplete information on the payer or the payee and assessment and reporting).

3/ Obligations on intermediary payment service providers (i.e. retention of information on the payer and the payee with the transfer; detection of missing information on the payer or the payee; transfers of funds with missing information on the payer or the payee and assessment and reporting).

4/ Obligation of cryptoasset service providers (CASP)

• Obligations on the CASP of the originator (i.e. information accompanying transfers of crypto-assets and transfers of crypto-assets).

• Obligations on the crypto-asset service provider of the beneficiary (i.e. detection of missing information on the originator or the beneficiary; transfers of crypto-assets with missing or incomplete information on the originator or the beneficiary and assessment and reporting).

5/ Information, data protections and record-retention

The Legislative Proposal must be formally endorsed by Council, before publication in the EU Official Journal.