On June 29, 2022, the European Council Presidency and the European Parliament reached a provisional agreement and extended the of the scope of a proposal by way of the "travel rule", which updates transfer of fund rules to include transfer of crypto assets. The rule aims to, “…ensure financial transparency on exchanges in crypto-assets and will provide the EU with a solid and proportional framework that complies with the most demanding international standards on the exchange of crypto-assets, in particular recommendations 15 and 16 of the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.”
The proposal hopes to hold service providers of crypto assets responsible for collecting and providing access to information pertaining to the originators and beneficiaries of those crypto asset transfers in an effort to expand “traceability” as a means to identify and block suspicious transactions, specifically related ML/TF risks. Under the agreement, the GDPR’s data protection rules will continue to apply to the transfer of crypto assets as well as existing sanctions that apply to all natural and legal persons. The provision must undergo confirmation by both the Council and the Parliament before it can be formally adopted.
More information on the provisional agreement is available here.