The European Union is proposing to ban anonymous cryptocurrency transactions as well as wallets as part of its broader plan to combat money laundering and terrorist financing.

Companies that transfer Bitcoin and other crypto assets are required to collect details of senders and recipients to help authorities in cracking down on dirty money, EU policymakers proposed on Tuesday.

These latest efforts to tighten regulation of the crypto sector would apply travel rules to crypto transactions, making them traceable. It is already applicable to wire transfers.

The law proposed by the EU is one of the recommendations of the Financial Action Task Force (FATF), an inter-governmental watchdog. The Commission said in a statement,

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing.”

The information collected by the company handling the crypto assets for a customer will include name, address, date of birth and account number, and the name of the crypto asset receiver whose service provider must collect required information as well.

Besides anonymous transactions, anonymous crypto wallets will also be prohibited, much like anonymous bank accounts are already banned under EU anti-money laundering rules.

The European Parliament and the EU states will be deciding the fate of these proposals as such could take about two years to become law.

According to the EU, these proposals are designed to “find the right balance between addressing these threats and complying with international standards while not creating excessive regulatory burden on the industry,” helping the crypto-asset industry develop in the region “as it will benefit from an updated, harmonised legal framework across the EU.”

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