The legislation will be the first in the EU introduce tracing for crypto transfers and the blocking of suspicious transactions.

Information on the source of crypto assets and their beneficiaries will have to “travel” with the transaction and be stored on both sides of the transfer.

MEPs approved the legislation with 529 votes in favour to 29 against and 14 abstentions.

In Strasbourg, Sinn Féin MEP Chris McManus said that crypto represented a real threat to financial stability, consumers, and the environment and that they must be regulated tightly.

“At their worst crypto-assets can be pyramid schemes, they are used by criminal gangs for money laundering and to defraud working people and they can waste huge amounts of energy for no purpose. In short, I see little or no social or economic benefit to these tools of speculation.”

“We have seen the danger of these assets in recent times with the FTX collapse. We also think back to the cyber-attack on the HSE where ransom was demanded in Bitcoin.”

“Clearly this is a murky area and the more transparency and regulation that can be brought to bear the better.”

“I accept the reality that these crypto-assets exist and therefore, short of banning them, they must be regulated. I predict that we will be back here in the future tightening this regulation and closing any loopholes left open.”

“These rules must be implemented without any backsliding on the deadlines which means most of the rules must be in place within 18 months.”