Bitcoin Forum

Today is a sad day for those of us who use bitcoin and value our privacy. Just today, a law came into force in Spain that obliges entities that provide crypto-related services in the country to report absolutely all transactions carried out during the year.

This is a direct attack not only on our privacy but also on cryptocurrency users, as no other tax legislation has gone this far.

For example, there is no law in Spain that obliges banks to report each and every transaction carried out by all users. If in the course of an investigation there are suspicions, the authorities require the data and the banks give it to them, but they do not transmit all the data by default.

This will give the rest of the forum members an idea of what may be coming in the near future in their countries, especially in Europe.

I have searched for information in English about this and can't find anything published, although I am not sorry that it is in this forum that we are emphasising the nefariousness of this legislation.

I put a link in Spanish and anyone who is curious can use an online translator:

Hacienda de España conocerá todo sobre ti si compras bitcoin en exchanges centralizados (https://www.criptonoticias.com/regulacion/hacienda-espana-conocera-todo-si-compras-bitcoin-exchanges-centralizados/)

This is why it is advised not to use a centralized system to purchase or sell Bitcoin; instead, a P2P system is greatly encouraged. Since the law has ordered all crypto transaction data to be submitted, except for people who have used a centralized system to carry out their Bitcoin transactions, those who used a P2P system cannot be tracked. You can only see the transaction taking place in their Bitcoin wallet and also see the Bitcoin in the owner's wallet, but you cannot trace the user. So I feel sorry for those who used a centralized platform to purchase Bitcoin; they can be easily identified through their KYC details or log-in IP if the Spanish government wants to know the identity of individuals through the corporation of those entities that provide crypto related service.

KYC is an attached to Bitcoin; it's always said in this forum.

it actually talks about not needing to report transactions of value below 50,000eur and only sending account balance info once a year based on holdings of customers as of the 31st of december

so its not as "watch everyone" as the OP is trying to suggest

If you operate on a regulated exchange always assume that your entire trading habit is available to the government whether or not there is a public announcement of it being reported. Coinbase 2 years back reported that all transactions above $10,000 should be reported to the IRS^[1] and be rest assured many centralized exchanges can be doing this too.

If you want the government out of your business then do not use a centralized exchanges which are controlled by the government.

[1] https://www.bloomberg.com/news/articles/2021-05-20/treasury-calls-for-crypto-transfers-over-10-000-reported-to-irs#xj4y7vzkg

- Jay -

If you utilize any centralized organization, it's impossible to safeguard your privacy completely. This implies that if you conduct any transactions with a centralized exchange or wallet linked to a bank, your transactions would be reported to the government. The most secure method to manage your funds is through non-custodial wallets and Decentralized exchanges. Moreover, you can convert your currency through peer-to-peer (p2p) exchanges.

Well if it can console you in Italy too it is roughly like this, when you make your tax return you should declare exactly how many utxos have been moved and from which address to which address and obviously declare how many Bitcoins you currently hold and it is in any case much longer than Like this.  Obviously, if a lot of Btc and above all LN were to be used, it would be madness to have to keep track of all these outputs and inputs and I suppose that the exchanges will equip themselves with this function

You're absolutely right. That's one of the reasons I'm always scared of transacting my crypto-fiat deals with centralized platforms that can still be controlled by government. With such information at their disposal, they will be able to track and monitor the financial activities of the crypto enthusiasts in the country which is a breach to privacy. P2P is still the best option or a decentralized exchange.

There will always be a solution to every problem. If Europe becomes very stringent on Bitcoin operations, bitcoiners will be forced to move out and search for other better nations. This will make them lose huge investments, employment opportunities, and tax revenue. I didn't think there will ever be any consensus among nations regarding cryptocurrencies. Every nation will have its policy on the currency.

They know that the sector is growing rapidly and it will be a good source of revenue. So they want to regulate the cryptocurrency ecosystem so that they can collect taxes. The best option is to avoid centralized exchanges. But in some countries, the P2P system is functional forcing people to rely on these centralized platforms.

That is the one thing that OP got wrong and the other thing is that in many cases a single law really isn't the problem. If there is a law requiring companies to report transactions or balances exceeding 50,000 Euro, but there is no law that requires people to go through centralized services for transactions in order to legally prove their funds' origin later on, Bitcoin is still good to go for as long as people understand that it is important for the p2p economy to thrive. When the bundle of laws enfold mutual effects such that transactions facilitated by centralized services must be reported and using a centralized service is the only legal way to prove the origin of your crypto funds, it's starting to look worse for the industry. In Europe they initially planned a whole web of laws that would severely undermine privacy and the practicability of cryptocurrency usage, but it seems that they have revised their point of view from what I can tell for now.

I think that's not even new to the most that have been using centralized exchanges. They keep our records and transaction data whether it's been for a year or two. That's why if by any chance a government started to ask a certain exchange that has an office or part of their jurisdiction for some data of their customers, they'll obliged to do that. While in many parts of Europe, these regulators are becoming too strict. I guess that everybody who has huge businesses up to the scale of exchanges are willing to extend their operations somewhere else like in the part of South Asia where they're encouraging businesses to come over there and have their operations there worry-free.

Really? Here is the law.

https://www.boe.es/diario_boe/txt.php?id=BOE-A-2023-8576

What you say is another part of the law, which requires reporting of balances in excess of that amount held 'abroad'. But this is not new, what is new is what came into force yesterday.


Translation:



There is an obligation to report absolutely all transactions. Big Brother came yesterday in Spain.


If you're going to insist on that I hope you base it on data and not on a misunderstanding like the other guy.

This goes well beyond the EU MICA regulation, which imposes a full KYC obligation for transactions over €1,000, although it requires certain data below that threshold.


Think again. There is a difference between exchanges keeping your details and only sending them only upon request, and having to report absolutely all transactions to the tax authorities.

After this laws implemented, now Spaniard who want to value their privacy about their Bitcoin need to use Tor, Bisq, Bitcoin mixer and other things that make sure the centralized party e.g. government, internet provider, banks can't track their Bitcoin holdings. But this will be considered as illegal act and broke their laws, so anyone need be careful enough.

Centralized exchange without KYC can still track your IP logs and your real name, you have no way to hide.

I think any tax legislation had been like this before, you're need to report anything that involving about capital gain or source of income.

This is indeed a bad news for crypto community and concerning development for all those who value their privacy when using crypto currencies, this development underscores the importance of avoiding central exchange whenever possible. I am afraid other European countries may follow the example of Spain and similar regulations is implemented  about regulating the crypto currencies within their own borders. It is always advisable to stay informed about latest development in crypto regulations in your own country, as well as internationally.

Governments and privacy don't really mix well. Governments are all about controlling people. How are they gonna tax you or punish you if they don't know what you do? Maybe we are seeking the solution in a wrong place... (crypto) maybe we should fight the governments and make them go away. Think about it, we are using government so they won't know who we are and what we do... but then they ban crypto and there is nothing we can do to stop it... Either way war is inevitable.

Yes, It was heartbreaking to hear about the new law in Spain which obliges crypto-related entities to report all transactions made throughout the year. I think it is important for the government to strike a balance between regulating the crypto industry and respecting the privacy of its users. Laws that go too far in one direction or another can have unintended consequences, such as leading users to more anonymous and decentralized forms of crypto that are more difficult to regulate.

As the crypto industry continues to grow it is imperative for governments to keep up with the latest developments and adapt their regulatory frameworks. We here certainly have the same expectations from the government where we agree that for future regulations to strike a balance between protecting users and supporting innovation in the crypto space.

This is one thing that makes me feel bad towards this centralized exchanges, because they are been controlled by the government. Before it is a KYC thing,information of users are always in the government finger tip,if they want it,without the person's knowledge. A noncustodial wallet and a decentralized p2p exchange will save one from this abuse of privacy. So many persons have gotten their account freeze for using a centralized exchange. I love the way bitcoin network and the blockchain is designed for safety and privacy for its users. It is only the people that uses bitcoin in a centralized way that gives access to governments and whosoever that wants to poke their nose into their financial life.

Such regulations seem to have been made by the Spanish government to be able to monitor people who commit crimes such as money laundering, tax evasion, or other crimes. It doesn't really matter to people whose transactions are under 50000 EUR, because none of their data will be passed on to the government.

Especially when using a centralized platform, all of our data will not be safe, there is no single centralized platform in the world that is honest about customer data protection. So it's pretty useless if you expect data protection on a centralized platform.

Why the Spanish government only monitoring their citizens who committing crimes when they're the one who had committing crimes [1] in the first place? they can force their citizens to report the total wealth and incomes of the citizens, but the citizens don't have any way to ask it and they will say it's privacy, that's double standard.

How can the government can be trusted when there's no transparency and had making multiply same mistake?

---

[1] https://en.wikipedia.org/wiki/Corruption_in_Spain

Calm down OP, this have once happened in my country and we are forced to stay away from centralized exchanges, all my friends including myself move completely to peer 2 peer exchange and do p2p trades to bank account or send money using p2p to buy some crypto, it's really not a problem if people in Spain know their way around this.

I also believe that this move won't last, I have not seen a country getting this tightened on crypto lasting longer, sooner or later they will know that they are missing out on something that the whole world is benefiting from, they will call it off and find a minimal fair way to approach this. Today this is no longer a problem here, now the government wants people to start trading in crypto using banks, but believe me, people have wised up, they just stick to the p2p trade, sayings it's even better and safer from the government.

It is as if the government's strictness helps the people in my country to get smarter and stay away from centralized entities.

In my opinion Based on what you shared, it seems that crypto regulations in Spain are tight causing disruption for those involved in the market. I'm sure there are many other options where people can find alternative solutions by switching to peer-to-peer exchanges despite the current restrictions. Is it also possible that the rules will be relaxed in the future and adapting to changing situations is very interesting to follow.

Even though the law looks very strict, I think people will still be able to use or find their own way out which can still provide comfort in using crypto. And I think the law will only work temporarily because I also think there must be officials from the government playing in crypto and they're not going to report what they have. And eventually the law will be revised to benefit the government people while the public people are just forced to follow it.

So it's better to stay calm and try to find a way out so that when the government becomes more strict, they can use other ways to keep using crypto. And let's hope there are no restrictions on using crypto in other countries.

This is just the beginning...

Europe has fallen since the 2,5 year Corona Scam. (Followed up by the USA Proxy War in Ukra-Nazi-Land)

90% of the people in the EU are blind as f*ck, when in the meanwhile the EU has introduced heavy rules on;
Regulatory, Censorship, Wokeness, CancelCulture, Bitcoin\Crypto, etc.

CBDC is almost ready to be dumped on the EU clown mass and they don't seem to understand what is going on.

There will be a coming CO2 budget to use and people will be very limited in there travel and freedom...

Are you getting WHY in the EU they are "blocking" the on- and off-ramps to Bitcoin and Crypto?

Everybody has to go in the Prison called EU...  Everybody, NO Exceptions!

Who would have thought, right.

This comes with no surprise for me, they have this planned for many years.  More force, more supervision, less freedom, less rights.  Bitcoiners especially, because we are a threat to the system!

How in the world is Bitcoin other wise treated as the most criminal monetary system when Fiat is used in politics for many crimes along the year.  Bitcoin is uncomparable to Fiat when it comes to dirtiness.  Fiat is muddy as hell.  But banks can supervise you, you get one account and they can track it.  Bitcoin is much harder to trace so it drives them nuts.

Freedom!  Unfortunately I think we will reach a boiling point where Bitcoiners will be the only remaining rebels of the muddy Fiat system because that will be the only way out.  CBDC's, reporting all transactions, let me be!  I want a peaceful life, not to be stressed out and treated like a criminal at any corner of the street.

I don't think that the new privacy law passed in Spain will have a negative impact on Bitcoin, other than that usually rules like this will only apply to platforms registered in Spain (the effect is not so strong for platforms registered in other countries).

btw, since the chipmixer was seized, there are many countries that have tightened rules regarding privacy on the grounds of securing private data, preventing money laundering and tax evasion.

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Indeed it might be a sad news for all those who want their privacy respected, However there are always two sides to a story.
In the longer run this may become beneficial for people as everything will go through a legit system. It will boost the confidence to invest more in crypto and the fear of losing your investment in a crypto scam will be lesser.

Yes, I understand the point. IMHO, when we use exchanges especially the ones that are in niche of focusing local users/customers. Even if they don't ask for KYC but then with most transactions coming in and out, I'm thinking about those withdrawals and deposits that have been done in fiat and given the details about bank account numbers and names from an account that's not yet KYCed but then, the saved record or data that's been provided by the user through that withdrawal is still kept by the exchange.

not really controlled by the government but by individuals that are known and are also subject to some rules and the issuance of a certified operation permit. Not that they directly work under government control, but since it has some guidelines to obey according to the operation permit offer by the government, they can decide to give any unnecessary orders against the centralized platform due to some suspected cases, and the centralized platform can freely give out your KYC information to the government to carry out their investigation. Aside from this, there are other risks attached to KYC platforms; if their platforms get hacked, all their private information gets exposed, which can even be used to commit some great crimes.