The European Council will develop new rules for virtual currencies exchange and wallet providers before the end of June. It also recalls to strengthen verification requirements for prepaid cards customers.

The statement, published on Friday after the EU Council meeting in Brussels, underlines “the importance of achieving rapid progress on legislative actions” concerning virtual currencies and pre-paid cards and emphasises the need to elaborate legal measures against illicit money flows.

The EU Council calls on the Commission to introduce amendments to the Fourth Anti-Money Laundering Directive (AMLD4) and the Second Payment Services Directive (PSD2) no later than the second quarter of 2016.

Speaking at a press conference following the meeting in Brussels, Valdis Dombrovskis, Vice-President of the European Council, said:

“By June at the latest we will propose measures to...have better control of payment forms such as virtual currencies and anonymous pre-paid cards.”

On 2 February the European Commission announced its Action Plan proposing to develop amendments “to help identify the users who trade in virtual currencies” and put an end to “the anonymity associated with such exchanges.” Furthermore, the Commission seeks to introduce “customer due diligence” thus demanding vendors to verify the identity of prepaid cards’ customers.

The declared purpose of changing the Fourth Anti-Money Laundering Directive is to prevent the financing of terrorist activities. The European Commission urges to enhance the Directive AMLD4 on virtual currencies, which are not yet mentioned manifestly in this document. Currently the Directive AMLD4 contains the notion of “anonymous e-money instruments”. This cannot be considered a referral to crypto- or virtual currencies since they are not e-money under the EU’s vocabulary.

As CoinFox has written earlier, if virtual money is put under the scope of the AMLD4, anonymous money exchanges from fiat to digital currency (for example, bitcoin) would be impossible.

The proposal to make amendments to the Directive AMLD4 was made and adopted during an extraordinary Justice and Home Affairs Council meeting held on 17 and 18 November 2015, after the terrorist attacks in Paris.

Elena Platonova