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European Commission calls for tighter identity checks on cryptocurrency exchanges

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ByMarcel Bich

Jul 8, 2023
European Commission Urges Crypto Checks
Marcel Bich
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The European Union is considering calls for stricter identity verification measures on cryptocurrency exchanges. These measures are intended to counter the growing use of cryptocurrency as a means of payment for drugs on the Dark Web, according to a report funded by the European Commission.

The study was commissioned by the European Agency for Drugs and Drug Addiction. The report comes at a time when European lawmakers are attempting to enact legislation against money laundering via cryptocurrency.

Police training could be more effective

The report is authored by specialists from the famous provider of blockchain analytic solutions Chainalysis. According to them, stricter identity verification requirements on cryptocurrency exchanges could actually help curb illegal activities and money laundering.

However, the report’s authors cautioned that a complete ban on cryptocurrencies is highly undesirable and ineffective in the long term. Criminals will still find ways to circumvent such measures. An example is the closure of the Hydra trading platform in 2022, which had a short-lived effect, while alternatives to the closed platform started appearing almost immediately.

Instead, the report suggests a focus on better training for law enforcement agencies to combat Dark Web activity. For example, response capabilities could be improved and police could be trained to use advanced technology to investigate crimes. In particular, police officers could use encrypted platforms, as well as practice mechanisms to track and seize cryptocurrencies.

Currently, the European Commission tries to pass the laws for more strict cryptocurrency legislation. Under the proposed legislation, users transferring funds will also have to undergo identity verification. Additionally, upper limits for anonymous cryptocurrency transactions could be adopted. Parliamentarians are currently debating the potential measures.

 
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Marcel Bich

Marcel ‘s passion for the world of cryptocurrencies and his comprehensive knowledge of blockchain technology make him an invaluable asset to our team. He stays updated on the latest trends, regulations, and emerging technologies in the crypto space, ensuring that our audience receives accurate and up-to-date information.