The European Union (EU) will soon decide if it approves a proposal to require cryptocurrency firms to collect data about both the sender and recipient of a transaction. Banks and payment companies are already required to keep information that “travels” between payers or recipients under the “travel rule.”

The European Parliament is about to vote on expanding the reach of the travel rule applicable to cryptocurrency firms. The vote is expected to take place within the next weeks.

Travel rules require that any financial transaction exceeding €1,000 (US$1,071) be reported to financial authorities. This has been celebrated as an achievement in anti-money laundering (AML). However, the new proposal seeks to eliminate the reporting threshold.

European exchanges could be required to report all cryptocurrency transactions. If the proposal is approved, all crypto transactions will need to be reported by exchanges, even if they are less than €5 (US$5.35).

The bill’s authors argue that cryptocurrency transactions are used frequently to finance terrorism and launder money. This loophole would allow digital assets to be used to hide and fund criminal activities since illicit capital can travel anonymously and without geographic restrictions.

Ajinkya Tupule, head of compliance at cryptocurrency exchange BitFlyer, stated that some transactions might be suspended by crypto exchanges until the Know Your Customer (KYC) processes are complete. This could lead to delays in settlements, among other problems.

Tulpule added that there are coins that aren’t covered by a transaction monitoring system. As they adjust to the new regulations, this is another problem that cryptocurrency exchanges will need to deal with.

The Markets in Crypto Assets Act (MiCA) is looming over the European crypto industry, as well. This legislation aims to “streamline distributed ledger technology (DLT) and virtual asset regulation in Europe while protecting investors.”