The European Union has reached an agreement on anti-money laundering rules for cryptocurrencies that would spur firms to check their customers' identities, in the latest regulatory tightening of the freewheeling sector.
The European Parliament and Council said on Wednesday that the rules, which were opposed by major U.S. exchange Coinbase Global Inc, would require firms to report suspicious transactions to regulators to help crack down on dirty money.
Coinbase did not respond immediately to a request for comment.
The regulation of the $2.1 trillion sector remains patchy across the world.
The rules require approval from several bodies to take effect once they are written. The oversight would ensure that cryptocurrencies assets can be traced in the same way as traditional money transfers, the statement said.
Ernest Urtasun, a Spanish Green Party lawmaker who helped steer the measure through the European Parliament, said that the new rules will allow law enforcement officials to be able to identify the real person behind the transactions.
In a letter sent to 27 EU finance ministers on April 13, cryptocurrencies businesses asked policymakers to make sure their regulations did not go beyond existing rules under the Global Action Task Force FATF, which sets standards for combating money laundering.
On Wednesday, the European Parliament and Council said that the proposed rules would also cover 'unhosted'' cripto wallets held by individuals and not managed by a licensed cripto exchange, for transactions exceeding 1,000 euros $1,044.