Members of the European Parliament approved rules for cryptocurrencies on Thursday, a first step at a time when numerous regulators around the world are trying to regulate the sector with the aim of combating money laundering and terrorist financing and protecting consumers.

Until now, the transfer of virtual assets, such as bitcoins, has escaped European legislation on financial services.

Under the new European legislation, digital asset service providers will have to register and provide accurate identity data if they wish to operate in the EU.

In the future, the “ money travel rule ”, used in traditional finance, will apply to digital asset transfers.

This rule will force digital asset service providers to provide certain information about customers and transactions to the financial institution that receives those transactions.

In order to reduce the high carbon footprint of cryptocurrencies, the largest cryptocurrency providers will have to disclose their energy consumption.

These texts aim to enhance consumer protection and provide guarantees against market manipulation and financial crimes .

However, many considered that these new measures were not sufficient.

"Players in the cryptocurrency space will be able to start applying ground rules for traditional finance," European MP Aurore Laloc said during the debates on Wednesday.

"It's good, it's better than nothing, but is it enough? No!" she added.
Illegal transactions with digital assets doubled in 2022, reaching nearly $21 billion, despite the market shrinking, according to data platform ChainAnalysis.

Setbacks in recent months, including the bankruptcy of banks and platforms such as FTX, have rocked the cryptocurrency world and rekindled debates about regulating the sector.