Huw Jones and Tom Wilson

LONDON (Reuters – The European Union’s lawmakers voted Thursday in favor of tighter controls for bitcoin transactions. It is yet another sign regulators are clamping down on the sector.

The European Parliament has two committees that have reached cross-party agreements to vote on. Global Inc warned that Crypto Exchange Coinbase (NASDAQ 🙂 would be subject to surveillance, which could stifle innovation.

Global regulation of the $2.1 trillion cryptocurrency sector remains patchy. Policymakers have been working harder to ensure that the sector is regulated in line with concerns about bitcoin and other crypto currencies.

According to the EU executive European Commission’s proposal, exchanges and crypto-firms such as cryptocurrency firms would need to get, keep, and report information about those who are involved in transfer transactions.

It would be easier to report and identify suspicious transactions and freeze digital assets. This measure was pushed through parliament by Ernest Urtasun of the Spanish Green Party, who helped to push the bill through.

While the Commission originally proposed the application of the rule for transfers exceeding 1,000 Euros ($1,116), this rule was deemed a ‘de minimis rule’ by the cross-party arrangement. This means that all transfers are now covered.

Urtasun explained that the removal of the threshold makes the draft law more compatible with global Financial Action Task Force rules, which set standards for fighting money laundering. These rules stipulate that crypto firms will have to share transaction data.

A waiver for transfers of low value is inappropriate, since crypto users can create an almost infinite number of transfers to circumvent the rules, Urtasun stated. He also mentioned the small amount involved in transactions linked with a crime.

Also, new provisions were agreed upon by the legislators’ committees on crypto wallets owned solely by individuals. The EU also created a list of cryptoasset service providers that is high-risk and non-compliant.

Paul Grewal, Coinbase’s Chief Legal Officer, stated in a blog Monday that crypto was not the best way to conceal financial crimes.

The final law will be drafted jointly by the EU and the parliaments. Countries have also agreed to eliminate de minimis.

($1 = 0.8961 euros)