Europe threatens to control everything if this law is passed

After dropping a ban on tainted cryptocurrency mining, Europe does not appear to have finished its intention to regulate cryptocurrency. The bill submitted to the European Parliament provides for a Control of all transactions in and with regulated cryptocurrency exchanges. Concretely, all transfer information in the context of crypto transactions will be collected systematically if the text is passed, as is already the case for bank transfers of more than 1,000 euros.

Thus, the sender and receiver of the payment will be clearly identified, deconstructing the anonymity of blockchain networks. The data thus collected will be made available to the relevant services upon request. The purpose of the bill is Reducing the blockchain’s tendency to fund crime and terrorism money laundering. In addition, the text of the law could force users to accept unprecedented control over their locally hosted crypto wallets.

This proposed law could severely limit cryptocurrency in Europe

In addition to stock exchanges, the text proposes regulation “Providers of automated kiosks or devices connected to an automated ledger network, also known as crypto vending machines, allow users to make transfers of crypto assets to a crypto-asset address by depositing cash, often without any form of payment. Customer identification or verification. Cryptocurrency ATMs are particularly vulnerable to money laundering risks due to their anonymity and the potential to use anonymous cash, making them an ideal vehicle for illegal activities.”Text details.

The bill also rejects any exception for small transfers: Due to the inherently borderless nature and global reach of crypto-asset transfers, it is difficult to distinguish between purely local remittances on the one hand and cross-border remittances on the other. Moreover, the speed with which transactions are executed, the virtual nature and technological characteristics of crypto assets facilitate the use of techniques aimed at practicing evasion of all rules on the basis of thresholds. To reflect these specific characteristics of crypto assets, excluding low-value transfers is therefore inappropriate for crypto-asset transfers.”

Text adds: “Due to the high risk of money laundering and terrorist financing posed by unregulated crypto-asset providers, who provide services based on complete anonymity and are not recognized by any jurisdiction or based in high-risk third party countries […] Providers of crypto-assets and other entities subject to the script should avoid interaction with these unregulated providers.” However, there is also a modification that requires “Do not apply this provision to transfers between persons who are not under servicing of crypto assets.”

However, once a person with a local wallet interacts with the exchange, the script will ask them to collect the identity of the owner of said local wallet. In the event of a problem, platforms will have the power to suspend or decline transactions. And the authorities can easily trace the identity of those hiding behind the addresses of the wallets. In addition, the text authorizes these entities to collect funds without making them available to the beneficiary in the event of a problem. The rest of the proposed law contains recommendations for identifying the most problematic transactions between locally hosted wallets and crypto platforms.

Read also – European Central Bank considers crypto a threat

Voting on the text is set for Thursday. At the moment, we don’t know if this law has a better chance of passing than previous proposals that were recently rejected as part of the MiCA regulatory package that should soon regulate the use of crypto in Europe… What do you think of these provisions? Fighting terrorism, crime and money laundering? Do they risk slowing the development of cryptocurrencies in Europe? Share your opinion in the comments.

Leave a Comment