The European Parliament is planning to propose the introduction of jail sentence of 3 to 5 years for people committing frauds with virtual money, including phishing scams and skimming tools. The EP Committee on Civil Liberties, Justice and Home Affairs has supported this proposal, the EP press center announced.

If the changes are approved by the majority of MEPs, the discussion will begin with the EU countries.

It is proposed that when judges issue a sentence with the maximum sanction provided for cases of such kind in the national law, to have an effective detention of at least three or five years.

These penalties are intended to be imposed on fraudsters which “download” data from bank cards or send misleading electronic messages. It is recognised that in the various EU countries, the legislation is very different, and this unfolds large opportunities for criminals.

The EP is considering the scope of the new legislation to cover also virtual currencies. MEPs recognise that virtual money fraud is a major source of revenue for organised crime.The regulation of encryption will be part of the agenda of the European Union Finance Ministers meeting in Vienna on September 7th.

The topics of discussion will include the abuse of encryption (money laundering, financing of terrorist organisations and tax evasion) and the lack of transparency in cryptography, demonstrated in a draft document quoted by Bloomberg.

At the same time the regulators have the will to find a way of using the new technology. The document also states that the initial coin offering (ICO) via tokens “have proven itself as an effective way to accumulate capital”. The lawmakers are in a race to greate legislative framework for one of the biggest investment craze during the last few years.

In Europe, since the last year there where series of warnings from the authorities toward the investors in cryptocurrencies regarding the risks and that the current laws do not offer protection. European Commission has promised to monitor the development and to make a statement whether there is a need of new legislation.

In May 2018 The European Union has also prohibited anonymous transfers in cryptcurrency as part of a new anti-money laundering and terrorism Directive, which must become part of the national legislations of the Member States in 18 months. Banks will have to carry out additional checks on the financial flows from countries that serve as tax havens for terrorists.

There are currently countries in Africa, Asia and Latin America in this list of money laundering destination. Bulgaria is not a member of the organisation in which 34 countries from all over the world cooperate with the fight against money laundering, but it will have to comply with the list as a EU country.