Bitcoin Forum

After yesterday's vote of the European Parliament committee, I have become very pessimistic:

EU Parliament Passes Privacy-Busting Crypto Rules Despite Industry Criticism. (https://www.coindesk.com/policy/2022/03/31/eu-parliament-votes-on-privacy-busting-crypto-rules-industry-rails-against-proposals/)

"Lawmakers are set to end even the smallest anonymous crypto transactions, and plan measures that could see unregulated exchanges cut off."

The law will affect exchanges and non-custodial wallets, such as metamask, ledger and trezor, as I explained. (https://bitcointalk.org/index.php?topic=5391709.0)

But it must be said that this is only the first step of a law, which will take some time to be approved and can still be modified, but they have made a bad start:

"The plans must also be agreed on by both the parliament and national ministers, who meet as the EU Council, in order to pass into law."

In line with my pessimism, I came across an even more pessimistic article, Digital currency industry melts down ahead of key EU vote on non-custodial wallets (https://coingeek.com/digital-currency-industry-melts-down-ahead-of-key-eu-vote-on-non-custodial-wallets/), from which I will quote an excerpt:

(The article was written before the vote took place)

"If the vote goes through, this will radically alter how digital currency transfers work in the EU. It will undoubtedly place huge burdens on unhosted wallet providers, but then again, the EU doesn’t care about that. It only cares about its objectives as a political entity, and it’s notoriously tough on financial crimes, money laundering, and tax evasion. The EU was never going to let Bitcoin and other digital currencies run free, given the way they have been portrayed for the last several years and given the widespread anti-government and anti-law sentiment within the industry.

This was always coming, and it’s going to happen everywhere

Slowly but surely, people are beginning to realize that Bitcoin can not subvert governments and allow people to do whatever they like without consequences. That narrative led to disasters like the Silk Road and extremist anarchists like Cøbra touting Bitcoin as a tool to bring in the sort of chaos they wanted to see in the world. However, Bitcoin isn’t suitable for any of that, and its success entirely depends on being legally compliant.

As we see, powerful governments can use the law to force their will on the industry. We saw in Ottawa how lawmakers could freeze wallets with millions worth of BTC in them with the stroke of a pen. We’re seeing how even the idea that the EU could require unhosted wallets to be linked to identity is causing mass panic across the industry.

What happened to the narrative that Bitcoin could withstand all of this, and governments were rendered powerless when faced with it? This was a lie all along, and big companies like Coinbase, Binance, and others with teams of lawyers and advisors have always known it. They are profit-seeking entities, and they will always comply with whatever regulations they are required to, or they’ll be banned from large markets like the EU, U.S., and others.

Everything is changing before our eyes in the digital currency industry. With bans on anonymous transactions well underway, the U.S. SEC circling the likes of Ripple and Tether, and Satoshi’s Bitcoin slowly being understood as an electronic cash system designed for small casual payments that works within the law and which is always subject to it, things are ever so slowly changing for the better. If the EU votes to pass the new rules, it will be another nail in the coffin for the false narrative plaguing the industry."

And the problem with this is that it sets a precedent and entrenches a trend of increasing state control.

What do you think about it? Are you as pessimistic as me or this article?

Edit: go to page 2  (https://bitcointalk.org/index.php?topic=5392457.msg59724548#msg59724548)for the key proposals of the draft.

Also: PLEASE REALIZE THAT franky's ARGUMENTS ARE GARBAGE. As they are based on a former draft on a slightly different subject, that didn't pass, as I've shown on page 2.  (https://bitcointalk.org/index.php?topic=5392457.msg59725195#msg59725195)

I kinda had a feeling that this vote will go this way that is bad for crypto. I guess there still is a chance this won't happen any time soon because it has to go trough a bunch of other bureaucracy stuff in order to go trough. However, I really do think that unfortunately this is the future for crypto in the EU. Maybe a distant future (because of bureaucracy), but definitely a future.

In other words they can only target anything that is centralized.
- MetaMask: is a centralized non-custodial wallet created and controlled by a centralized company in United States called ConsenSys. It also relies on their centralized servers. It is controlled by the company hence can be forced to obey what the authoritarian government demands.
- Ledger, Trezor and all hardware wallet: are centralized non-custodial wallets that are issued by centralized companies and those companies can be forced to even introduce backdoors into their product.

Anything decentralized like bitcoin core, electrum, etc. is not affected.

This kind of aggressive invasion of privacy and human rights has always been only happening in countries with authoritarian regimes not everywhere.

Although I am gradually acquiring more technical knowledge, I realize more and more that I still have a lot to learn. I didn't know that distinction you make. For me until now there was a distinction (in my mind):

-Custodial wallet: not good for your privacy.
-Non-custodial wallet: good for your privacy.

But I didn't know that difference between decentralized and centralized non-custodial wallets, so thanks for that.

In any case, I believe that very few people will use Bitcoin with maximum privacy.

So this mean you aren't even allowed to hold your Crypto on a Ledger/Trezor?

No, it means that if you hold your crypto on a Ledger, Trezor or any other non-custodial wallet, you will have to provide information about a receiver when you are sending your crypto. The same will probably be when holding your crypto on an exchange.

But how will they know who owns each address? There is no mention about mandatory KYC procedure for people who holds crypto on a non-custodial wallets. If there won't be a KYC, how will they know who are the owners? And if they don't know who is the sender, how will they punish him for providing false information about a person they are sending crypto.

Damn, can't we just say we are sending money from one wallet of ours to other? They won't know shit TBH.

That's exactly what I was thinking. I guess we'll have to wait for the law to go trough all the bureaucracy to see what can and what can't be done.

I see that you look at it darkly, but whatever is happening I can consider it good.
We cannot read this vote in isolation from what is happening in Ukraine, and therefore governments are trying to anticipate any news indicating the possibility of transferring Bitcoin to and from Russia.


So new users will be afraid of freezing because they usually use centralized platforms.

 - As for the decentralized platforms, decentralized services, wallets and others will not be affected.
 - Centralized platforms will be severely affected, so our role is to support decentralized platforms.
 - Currencies with low market capacities, altcoins, DeFi, NFTs and others will have the greatest impact because most of the services/wallets are centralized.

We don't have to tell them anything. At all.
As @pooya87 said, everybody will just switch to the decentralized platforms. We can (and should!) use hardware wallets without their crappy wallet platforms and go on.

The only problem I see is that this will slow down the interconnection between Bitcoin and the financial world.


So it clearly looks bad, but I have high hopes there will be plenty of ways to avoid EU crap when we want to and this may actually make people start using Bitcoin.. more properly.

They will only be able to target centralized organizations that adhere to KYC requirements... you will still be able to use other non-custodial wallets. (Paper Wallets for Cold storage and desktop wallets)  :P

Bitcoin started out in an era where there was a lot of uncertainty over it's legality in the early days, so the focus was a lot on anonymity ..but things have changed over the years, because Bitcoin has gone mainstream and the regulators have caught up and defined it within the financial world.

The thing that triggered this latest "clamp down" was the Russian sanctions and some people using Crypto currencies to bypass the sanctions. (It is all about control)  ::)

I like to think of privacy and (de)centralization in terms of degrees instead of just being black and white (either centralized or decentralized).
For example the decentralized exchanges we see that rely on a company and have a centralized authority taking a fee from each trade aren't fully decentralized but they can't be called centralized either. I would give it a rate of 8 out of 10 for decentralization.

Same with wallets.
For example we have blockstream's green wallet that has a default 2of2 multi-sig setup where you depend on their servers to spend your money, or to sync your wallet the default server is theirs and nothing else. So it can't be called fully decentralized or fully non-custodial or fully privacy-friendly. If the defaults were used all rates will be 0 out of 10.
Electrum in comparison gives you full control over your keys and you don't rely on a single server but it still doesn't provide full privacy. I'd give it 10 for decentralization, 10 for being non-custodial (9 for their multi-sig) but 5 for privacy (can be improved by running Tor or your own server).

People just have to learn the pros and cons of everything they use.

I am already using hardware wallet, what if Trezor is forced to enforce these rules if they want to do business?
A software update from them which ruins our privacy, this ain't difficult if the government really wants it to be.

You do have a point here, but I think that they can easily implement (if not done already, I don't have Trezor) in a way that the wallet/accounts part of the suite doesn't interact with the HW if you don't want to, at maintenance/firmware updates. The wallet part will have to comply, but you can use Electrum instead.

And if the hardware wallet makers choose to ruin their credibility and business by being overzealous at asking KYC / reporting, there's always the choice of using proper cold storage (although it may not be great for non-technical people, I know...)

At the end of the day, the person will still need to use some centralized service to be able to spend bitcoin.

---

I'm not particularly surprised by these measures, this was something expected to happen sooner or later, just seeing that they've been asking for KYC for a long time, so what did people expect? did you expect governments to be in favor of anonymity? what would be the point of just requiring KYC on exchanges and leaving other services without any monitoring or control?

the topic creator should not be quoting coinbase articles.. but instead the actual draft paper..

the 3 main things the draft ACTUALLY is concentrating on are these:
payment service providers(exchanges, mixers, custodians, 'professional financial advice services' shopping cart middlemen services)
and
ICO creators

and
stablecoin issuers (e-money tokens)

its not about person to person transactions using decentralised/non custodial/bitcoin wallets. its not about person to merchant/retailers transactions. its not about blockchain transactions.. its not about mining pools or asics or asic farm owners. its not about software developers

its about payment into regulated services like exchanges, its about financial advisers and payment service businesses. its about businesses or people creating new ICO(premine/airdrop/purchase of issued tokens) that want to be listed on exchanges or offer their own swap/exchange/payment/purchase service

as for having to get 'wallets' include KYC. this is not about normal cryptocurrencies or existing cryptocurrencies. its about what they refer to as e-money tokens which translates to stable coins

here is the classification of crypto asset service providers

Crypto-asset service provider authorised for the following crypto-asset services:

Crypto-asset service      Type of crypto-asset services                         Minimum capital requirements
providers
Class 1                         –reception and transmission of orders            EUR50k
                                     on behalf of third parties; and/or
                                   –providing advice on crypto-assets; and/or
                                   –execution of orders on behalf of third
                                     parties; and/or
                                   –placing of crypto-assets.

Class 2                         Crypto-asset service provider authorised        EUR125k
                                   for any crypto-asset services under class 1
                                   and:
                                   –custody and administration of crypto-assets
                                     on behalf of third parties

Class 3                        Crypto-asset service provider authorised for   EUR150k
                                  any crypto-asset services under class 2 and:
                                  –exchange of crypto-assets for fiat currency
                                    that is legal tender;
                                  –exchange of crypto-assets for other
                                    crypto-assets;
                                  –operation of a trading platform for crypto-assets.

as you can see it does NOT mention:
decentralised non-custody wallet developers
nor person-person private transactions
not person to merchant/retailer transactions

a retailer does not need to take KYC info for all transactions. but if its using a payment service to convert to fiat(EG bitpay) then bitpay will require to KYC of both the retailer and the customer

The topic creator isn't quoting coinbase articles. You are right that it is better to go to the current draft paper, but all the news agree on the same thing, and I do not trust your interpretative ability of the draft paper because I know your lenghty arguments interpreting in a peculiar way.

They can also force many of non-custodial wallets to stop their service. Most of non-custodial wallets are connected to centralized servers and can shut down at any time.
For example, trustwallet is a non-custodial wallet. But there is no guarantee that it will work the next time you want to make a transaction.
As stated by pooya87 (https://bitcointalk.org/index.php?topic=5392457.msg59713191#msg59713191), if you want a wallet which you can be sure that it will always work, you can use bitcoin core. It's open source and no centralized server is involved.

first of all YOU are the topic creator.. no need to play third person when its obviously me saying YOU should have quoted the draft instead of silly media

also i actually copy and pasted from the draft.. it clearly shows the classifications of what the service providers are

also
oh look coindesk.com

when you realise that coindesk is a sister company of coinbase and multiple other businesses and service providers. you have to take their articles into context of their editorial bias towards their sister companies

as for other media.. they just sheep follow and copy and paste the first news releaser and dont do any proper source checking.

also, you quoted coingeek. excuse me but your quoting the calvin ayres/CSW group.. seriously.. GET BETTER SOURCES


so please dont use sources of media/social media.. instead if you want to talk about pessimism of a draft bill QUOTE THE DRAFT BILL

Ok so it's clear, this is not about chasing down non-custodials, think even the EU at least would know the futility of cracking down on that (and they're all about open source these days aren't they?).

The thing that surprises me though is the low capital requirement to be a service provider. Little over 1 Bitcoin and you could handle transfers for someone else. I call that ease of doing business, or am I missing out on something?

First of all, you are the one who referred to me as the topic creator. You saying I'm playing third person is just one more of your bullshits.

Second, you don't need to use capital letters, that on the internet means you are shouting.

Third: I'm going to put you, for the second time, on ignore, the first time I took you out just for the laughs. This time I doubt I will take you out.

Just a quick comment to say thank you to franky1.

That is a top post my friend, thanks for going to extreme lengths to confirm exactly what this will entail. It doesn’t seem so bad now after all, does it.

there are also things like employing supervisors/compliance officers that specialise and trained in KYC/AML
the draft bill actually goes into detail of expected expenditure for a business to be fully compliant
the EUR50k if just a licence fee. kind of like a deposit. . there are other costs separate from that. including non-compliance fines

Just for clarity, I use Bitcoin Core to store most of my stash (since 2014)…..


1.) If I was to send 2BTC to a centralised exchange in Europe that I am KYC’d with, will they accept those bitcoin from my ‘non custodial’ bitcoin wallet & allow me to sell & withdraw fiat to a linked bank account?

2.) If I buy 2BTC on for example Bitstamp & withdraw them to my ‘non custodial’ wallet is that acceptable?

I’m not even residing in an EU country, just curious incase similar rules are enforced in the UK. Assume I live in an EU country though when responding.

1) yes because they know you. they are not looking to know your taint/previous receipts/how you got the coin. they just need to know about the 'you to them' part. because they are receiving coin they need to know you so they can ensure you dont just make 60 accounts trying to do £100 payments 60x times to get around not being noticed when you want to convert £60k with them

2)yes. the draft is not about making bitcoin core suddenly require KYC. its not about changing bitcoin transaction formats or changing the blockchain. its just about the payment services knowing their customers.

what you will find would change.. is if you were to swap value for instance to WBTC(binance pegged sidechain btc) or GBTC(greyscale bitcoin trust shares) those would want to know all trades and transactions with KYC applied to each transaction

because binance and greyscale are 'significant issuers of crypto-assets' (pegged coins) they will need to keep trade/kyc history

Perfect, thank you for such detailed responses man.

I don't agree that the market reacted to the news of EU voting. It's a correction started by S&P 500 like many times before.

https://i.imgur.com/tb0y8sf.jpg

You can see that the weekly top of S&P 500 correlates with the pump on bitcoin and it's the same with yesterday's correction.
I don't believe that companies like amazon losing 2% meant their investors were scared of EU crypto regulations.

So now seems that I have to move everything from my trustwallet, binance, and my Trezor into Bitcoin core to be able to be still free.
It's gonna be interesting how things will go with the collectables like Cas coins etc.
I don't like to KYC but if my coins will be locked and unusable probably will go trough the KYC.
You can always have some coins a side for extreme situations.

At the end of it all, this can only be very effective in countries with high security standard, advanced countries with high data source of all citizens, in developing countries i don't think this will be very effective. someone can easily attached a fake name with the wallet and am not sure if they can be able to identify that the name is fake. It seems crypto adoption just taking different turn, new laws every now and then that is not so good with crypto and what it stands for. :(

I think it's too early to worry much about it. It's important to stay informed and watch the new legislation coming into play. It could definitely be very damaging for the crypto community in Europe and limit our abilities to send crypto money freely. But they EU voted a few days ago on an outright ban of cryptos, which luckily didn't get a majority. So if politicians can be persuaded against any crypto ban in the future with tighter regulation than so be it. Who knows if this will get through all the national governments without any amendments. At the moment they propose the limit to report is at 1,000 EUR. Anybody who wants to fly below the radar has just to do many 999€ transactions. But maybe the limit will be raised before it becomes law. For cash the limit is at 10,000€ to be reported. Also there could be some loopholes for us in the future. Best to wait and observe.

Well, today I had more time to read the long draft, and I see that indeed as I said and was said in the articles I quoted in the OP, the draft poses a threat to privacy. I was going to quote excerpts throughout the text but I think it's going to be more useful to just quote the final proposals, putting in bold what I think is most relevant:

Source: https://www.europarl.europa.eu/doceo/document/CJ12-PR-704888_EN.pdf

The draft report puts forward the following key proposals.

1. No exemptions based on the value of the transfer

With respect to wire transfers, the Transfer of Funds Regulation requires a payment service provider to ensure that transfers of funds are accompanied by complete information on the originator and the beneficiary and to verify the information on their customer only if the transfers of funds exceeds EUR 1000, individually or as part of small linked transfers which together would exceed EUR 1000, except where the funds to be transferred are received in cash or anonymous electronic money or there are reasonable grounds for suspecting money laundering or terrorist financing.

Due to the specific characteristics and risk profile of crypto-assets, the information obligation should apply to crypto-assets transfers, regardless of the value of the transfer. There are clear indications that crypto-asset activities associated with criminal activities and terrorism financing are often transfers of small value. Furthermore, crypto-assets and related technologies enable criminals to split high value transfers into small amounts across multiple wallet addresses in order to avoid detection of AML/CFT monitoring systems and to carry out illicit activities via structured transactions to a scale and global reach not available to wire transfers.

In the view of the co-rapporteurs, the removal of a de minimis threshold for crypto-asset transfers would facilitate, rather than complicate, compliance and risk management by crypto- asset service providers. This is particularly relevant in light of the difficulty to identify linked transfers executed via multiple apparently unrelated wallet addresses as well as the high volatility of the valuation of most crypto-assets.

2. Transfers from/to un-hosted wallets

Secondly, it should be clarified that this Regulation applies also to transfers from or to crypto-asset wallets based on a software or hardware not hosted by a third party, known as ‘unhosted wallets’, provided that a crypto-asset service provider or another obliged entity is involved. In such circumstances, however, there should be no transmission of information to the unhosted wallet. Information should be obtained by the crypto-asset service provider directly from its customer and should be held and made available to competent authorities.

3. Know your transaction

In addition to obtaining accurate information on the originator and the beneficiary, crypto-asset service providers should also be expected to obtain information on the source and destination of crypto-assets involved in a transfer. In particular crypto-asset service providers should establish effective procedures to detect suspicious crypto-assets, in particular any link with illegal activities, including fraud, extortion, ransomware or darknet marketplaces, or whether the crypto-asset has passed through mixers or tumblers or other anonymizing services. This is especially important when dealing with transfers involving unhosted wallets or non-EU crypto- asset service providers not complying with the same travel rule obligations.

4. Counterparty due diligence and protection of personal information

Crypto-asset service providers are expected to transmit required information also to crypto- asset service providers established outside the Union. However, before transmitting such information, crypto-asset service providers should identify their counterparty and assess whether they can reasonably be expected to comply with the travel rule and protect the confidentiality of personal information. Crypto-asset service providers should avoid interacting with illicit or untrustworthy actors.

5. Public register of noncompliant crypto-asset service providers

In order to facilitate the identification of illicit actors that pose a great risk from a AML/CFT perspective, the European Banking Authority (EBA) should maintain a public register of noncompliant crypto-asset service providers, consisting of entities which cannot be linked to any recognised jurisdictions, do not apply any identification measures on their customer and offer anonymising services, given their role in undermining the effectiveness of AML/CFT systems and controls.

6. Fast track

Finally, in order to speed up its adoption and ensure that crypto-asset service providers and other obliged entities put in place effective mechanisms to comply with the travel rule for combatting money laundering and terrorism financing, the current recast proposal should be decoupled from the rest of the new AML package and should be linked to the existing AMLD framework until the entry into force of the new regime, while preserving the alignment with the upcoming Regulation on Markets in Crypto-assets [MiCA].

The co-rapporteurs are convinced that an effective and strengthened framework to prevent the misuse of crypto-assets for money laundering and terrorist financing purposes is necessary to protect EU citizens from terrorism and organised crime, while contributing to the development
of a safe, lawful and well-functioning space for users of crypto assets and crypto asset service providers across the Union. The co-rapporteurs call on Member States and EU competent authorities to ensure proper implementation and enforcement also in a view of avoiding unfair
and unregulated competition, including from non-EU players.

Finally, the co-rapporteurs emphasize the role the Union should play in promoting the implementation of the travel rule for crypto-asset transfers at global level as well as effective international cooperation to combat money laundering and terrorist financing.

There are other interesting things in the text, for example it also talks about ATMs:

"Providers of kiosks or automated machines connected to a distributed ledger network, also known as crypto- asset automated teller machines (‘crypto- ATMs’) enable users to perform transfers of crypto-assets to a crypto-asset address, by depositing cash, often without any form of customer identification and verification. Crypto-ATMs are particularly exposed to money laundering risks because the anonymity provided and the possibility of operating with cash of unknown origin, makes them an ideal vehicle for illicit activities. Given their role in providing or actively facilitating transfers of crypto-assets, transfers of crypto-assets linked to crypto-ATMs should fall under the scope of this regulation."

This seems to me to be along the lines of what has happened recently in the UK:

Bitcoin ATMs forced to shutdown in the UK (https://bitcointalk.org/index.php?topic=5389248.0)

So I reaffirm what I said in the OP, this draft is a clear threat to privacy.

I request to the moderators not to merge this post with the previous one, by its lenght to make things clear. These are obviously not shitposts and I do not do it to get paid more because this week I exceed my posting requirements.

After reading the long draft, I was thinking that I didn't remember reading in the draft what franky1 had posted. I took him off ignore, looked up what he had posted, without citing the source, and I see that it is not in this draft.

After investigating, I see that he is quoting a previous draft that was not approved.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593

The draft he cites is this one, which is not the one that was voted on last Thursday, nor the one I am referring to or referred to in the articles cited in the OP.

There is a thread on the forum about this previous draft.

EU Lawmakers Drop Bitcoin 'Ban' From Draft of Crypto Regulations (https://bitcointalk.org/index.php?topic=5388000.0)

Here is the most important part:


So any and all transfers which involve a "crypto-asset service provider" require full KYC and reporting to the authorities. So what's a "crypto-asset service provider"? See below:


So this involves every custodial wallet, every exchange, every swap service, every payment processor, every casino or sportsbook, basically every crypto service in question. If you so much as touch a third party, then they will be obligated to collect your information and pass it on to your government. The only thing that will remain private is direct transactions between individuals. If a merchant accepts bitcoin directly then (at least for the time being) they can avoid this, but if they use a payment processor then they will be collecting KYC as well as information on the source of your funds for all transactions.

especially in the last months, there were many thoughts, speeches, and votes against the economic freedom of bitcoin they just say they want to provide people safe transaction and do not let the fouds abuse the freedom of economy provided by bitcoin, there are also many other reasons such as clearance of the transaction and stop letting bitcoin becoming a world currency to have a new competitor for euro and dollar, these are all normal because by raising a system like bitcoin and other cryptocurrencies the other old and traditional systems should fight with it and do not let it rise.

If this bill is passed its worse than CBDC itself. They will be poking in people everyday life and will apply control on all aspects of financial activity. Its an ultimate totalitarian financial dictatorship! EU is no different than China now! RIP freedom and democracy!

This is bad news for the crypto world and it will mean they will likely use centralized exchanges to monitor what goes on in the non custodian wallets for every coin moved to and fro their exchanges. The way out is to defend against this privacy threat. I don't think it's nice to bid this awesome privacy offer by bitcoin goodbye already there must always be a way around to maintain what has been built upon this is where the relevance of the bitcointalk community needs to be proven even in the face of the big threat

That's one way to go around it, but I think they already have it figured out right before anyone even thought about it. Most probably they have diffent measures in place to make sure that the system will not be gamed and cheated by people, though for sure loopholes will soon be found by people to nullify what the EU is trying to do.

P2P is the way to go, always has been, and regulations and laws like this will force people to go back to crypto's roots.

I think that P2P trading will boom after this law passes. And I have nothing against P2P trading. It is much easier to sell crypto on some exchange, but those who value their privacy must give up on some commotion in order to preserve that privacy.

Both of your comparisons here are very weird and more like comparing apples and oranges.

CBDC is and will always be 100% centralized and you can't and will never be able to have any kind of privacy using it. In a sense it is no different than using banks as you already do. The bill on the other hand is targeting centralized services which doesn't affect bitcoin or "all aspects of people's financial activity".
Bitcoin on the other hand will always be decentralized and nobody can control it or your transactions. All they can do is to control big centralized places like a payment processor that shouldn't even exist in bitcoin ecosystem, or exchanges and such. But for example they can never force a supermarket that accepts bitcoin to ask for KYC when someone pays for a bag of chips.

And don't get me started on the fake democracy that never existed to begin with. Let me just say that those that claim they have democracy the most, don't have it at all :D

This is getting interesting.  AML, KYC and now Know Your Transaction?  Next up.  KEYC, also known as Know Everything You Can.  And people will accept it.  And they will be happy with it.

So what I understand is, this will apply to third parties.  To practically all transactions in which a third party is involved.  I can not see how they would ever be able to enforce Know Your Customer or Know Your Transaction on every single kind of wallet because then you would need to enforce all developers and GitHub to create a specific Bitcoin Core and Electrum just for Europeans whilst hiding the other versions from them.  And we know how well this would go too.  As well as getting GApps off Huawei phones did.

They can not ban Bitcoin's privacy features.  By banning them, they would immediately turn almost a trillion USD into underground money.  And I am certain many of us would NOT stop using Bitcoin due to a law.  In fact.  It could make us even more determined to choose Peer to Peer over centralized.  To use Bitcoin Core and Electrum over Binance.  And much more.

To me, it is still not FUD.  Do whatever with those centralized third parties.  I always tried avoiding them anyway and I expected the world was going to get more authoritarian over the years so I am not surprised.    What I am kind of surprised to see is how many humans are taking the bait.  Illicit activity is the reason they will take away each and every one of your rights.  For the better of humanity, for less crime they will continue to say.  Yet there is zero sign of criminal activity slowing down the more authoritarian they are.

-
Regards,
PrivacyG

This was bound to happen eventually on the EU level as Estonia (who used to be one of the most "pro" crypto countries) started implementing the same ( or similar) law several months ago. We all knew that governments will want their piece if cake once crypto reaches certain level of adoption, and it's happening as we speak.


I surely hope so, but I am not so optimistic as people tend to be conformists. Once you get out of bitcointalk, you soon realize how majority of crypto users don't care much about privacy, security, decentralization and all that being your bank thing.


You want to say that Democratic People's Republic of Korea (better known as North Korea) is not democratic at all? :D

About the Minimum capital requirements.

From what I can see it's in line with a lot of the requirements there in the US and NY.

And it's actually significantly lower then for some states, like Texas just to have a BATM or do any kind of crypto <-> fiat business that can easily hit $1million requiremets. So I don't see that as a big deal.

The rest of the privacy stuff is just plain nuts.

-Dave

Are you talking about those requirements franky1 was talking about?
 (https://bitcointalk.org/index.php?topic=5392457.msg59715356#msg59715356)
I've already shown (https://bitcointalk.org/index.php?topic=5392457.msg59725195#msg59725195) that he was talking about a draft that didn't pass. Not the one that is the subject of this thread.


?

Precisely this draft aims to do just that.  o_e_l_e_o has explained it well, and you gave him merits for that.

Let's see how he says it in another post:


The only thing that would be exempted would be transactions between two individuals but what this draft wants is something like if someone buys something in a supermarket for $1, paying in cash, they would be obliged to ask the customer for an ID to report to the IRS. This draft wants to do that for Bitcoin, which would seem absurd with cash.


Exactly, this is what this is about.

This is very unfortunate since such regulations go against the vision of Satoshi, which is to create a freedom of transactions without any government/third-party intervention in our finances. Though this may be the first step in creating the law, I hope that the bill somehow limits the power of the government to meddle with the transactions in our exchanges, etc.

Assuming that the law/s will be enacted, will there be a big impact of cryptocurrencies in their price? Will we see BTC becoming something that is stable on its price, removing its volatility and inflationary nature?

The network will keep chugging along, and do what it does for the last 10 years, without rest, without downtime, producing block after block, issuing coin after coin for Mr. Heroine dealer in the dark market. By design, Bitcoin was built to be a work around against censorship. It's up to you, the user, if you want to continue to use it, or not just because someone pounded a gavel.

This is worse than many people think.

There will be blacklist of "non-compliant" entities. So moving company outside of EU won't work.
If actors like coinbase,kraken and binance want to keep their SEPA FIAT EUR gateways, they'll have to comply.

This is an attempt to convert cryptocurrency system into Banking like system where every party of the transfer is known.
If that goes through and gets implemented, it's pretty much the end of crypto and many fundamentals it's based on such as 'not-my-keys-not-my-coins'

At this moment there's no such regulation in draft but i can imagine that the next regulation -  after 12 month review, will be prohibiton to exchanges in EU from accepting any kind of transfers from unhosted wallets.
If you don't comply and you use unhosted wallet, you'll be kicked out of system and you'll never be able to cash out these funds in EU.

You'll have bank-like-account with your crypto and you'll only use that to send money to exchanges.

It was nice while it lasted, good that we got couple of more years to cash out.
I'm also sure that this draft violates many rights and could be fully overthrown in upper EU courts. But this is gonna take years and before that happens crypto is gonna be done.


But i will also tell you one thing, EU crypto firms owners are aware how shitty these regulations are and what is going to be their impact on the market and their businesses
When new AML directive about source of funds was implemented in EU Near 2018, the Bitstamp was sold ;)
All EU exchanges are on heavy decline regarding volume and amount of customers since 2018.



It's worth noting that most crypto companies did absolutely nothing to prevent this from happening except of sending few emails, couple of days ahead of vote.  


It will remove liquidity from the market, the compliance processes will extend and onboarding of new customers will take much longer. There'll be less money coming into the space.
As said above, this is attack on crypto fundamentals. At this moment crypto value is based primarly on speculation and most who get into the space are coming here for speculative gains, when you remove more and more fundamentals.. it's not gonna be good.
After implementing something like one can expect  heavy price decline over time, however many are not yet aware how serious these changes are.
This might be related to fact that many of big players on the market are present on offshore exchanges.



Literally every big crypto exchange should spend significant amount of funds on lobbying to avoid this being implemented. Long term it's disaster.

I don't think this law will have much influence at the stability of Bitcoin price. It will be traded as it is traded now, the only difference is that the traders will have to do KYC if they live in the EU. And as we can see now, it seems as though majority of traders doesn't mind going trough KYC procedure.

I don’t think that this would affect those that are living outside the EU. But The thing is that other countries might as well decide to adopt the same strategy, we are just not sure about that yet. All this while the government were just taking their time to study cryptocurrency and how it works and then know the perfect way to come for it. And this is what they have just started to do now.

From what I’ve understood, and to answer your question, how this is going to work is that if you are sending Bitcoin from your decentralized wallet to an exchange that is centralized, I believe that it would be accepted by the exchange.

And then if you decide to send Bitcoin from your centralized exchange to a decentralized wallet like you have said, the exchange would require you to give information about who is receiving the Bitcoin that you are sending out. So, you are giving information about yourself and about the recipient for whatever transaction you are making. That is how it’s going to work.

Well, it depends on how the merchant is set up, as I explained here:


If a merchant is directly accepting bitcoin in exchange for goods or services, then they are simply a merchant who accepts bitcoin, and are not a "crypto-asset service provider". If a merchant, however, uses a payment processor to accept bitcoin in exchange for goods or services, then the payment processor is a "crypto-asset service provider", providing services on behalf of the merchant, and are therefore obligated to collect KYC and information about the coins you are spending.

That's my understanding, at least, but not being from the EU I am hardly an expert on EU law, and if EU politicians are anything like US politicians, they will openly twist and interpret the wording to mean whatever they want it to mean.

I see what you are saying, but maybe I don't want to be part of their system. Maybe the whole point I got involved in bitcoin in the first is was to get away from their system. Banning my bitcoin wallet and addresses from their centralized system achieves nothing, since I have never and will never use it to interact with their centralized system in the first place.

Peer to peer trading existed long before any centralized exchange, and it will continue to exist long after these centralized exchanges become nothing less than banks. There will always be a way to trade bitcoin.

Oh, OK. The fact is that I can't imagine today any large company, such as a supermarket, as we were talking about in the example, accepting payments directly, and, in addition, non-custodial wallets using maximum privacy. I can hardly imagine a supermarket like Walmart in Europe without using a payment processor and using Electrum via Tor, or a similar system.


Traditionally in Europe they are more social democratic than in the USA, which has some good pros, but one of the cons is giving up degrees of freedom voluntarily so that the State has more power, as it would be in this case regarding surveillance and control.

No, it's not.

The foundations of cryptocurrency, as an idea, are very strong. It is well known that peer-to-peer, decentralized networks are unstoppable. Of course and they can be regulated, but there's a limit. If you deposit your coins to big, centralized exchanges you fall back on the central point of failure. Don't. Use a DEX. You'll always be able to move them across pockets without anyone's permission.

I know no fundamentals that include the transition from crypto to fiat currency. This is what's going to get harder to do.

Not at the moment, no. But there are self-hosted payment processors such as BTCPay, which presumably would not fall under this legislation since there is no third party involved. And if this legislation is going to make every other payment processor in the EU start requesting KYC and proof of where the coins came from for every transaction from buying a coffee to paying for an Uber, then perhaps self-hosted solutions which bypass this will just become more attractive and more popular.

They just initiated a war, did they not?  They are attacking us with all these Know Your Customer like laws and the backslash they get is their laws are a HUGE incentive for more privacy oriented tools and software.  First was Bitcoin and they tried attacking it directly.  Then came the Mixers, Coin Joins and all of this and they tried labeling them all as 'potential illicit activity'.

Recently Mixers, Coin Joins and Lightning Network came under attack.  And as of now they are trying to direct an attack towards Bitcoin directly.  Slowly, just like the Centralized Exchanges.  But for now, it looks indirect.  With Exchanges, first came the Tier 0 accounts with Verification Thresholds and now most of them turned into mandatory Know Your Customer for all accounts, with no Threshold.  It was only few years ago when you could have registered on at least 5 different Exchanges having Tier 0 (Unverified) account status.  Today there are only a handful.  Binance got cut off the list only recently as it now enforces KYC.  Now here comes Know Your Transaction, the next step.

If some governments started requesting tax reports for EVERY on chain transaction, even staking and the European Union is willing to go as far as requesting Know Your Customer or Know Your Transaction information for every single transaction made through third party payment processors.  Some countries have maximum limits for cash transactions.  Then making Know Your Transaction information exchange mandatory with a threshold is very close.  Give them an inch, guess how much they will take.  I feel attacked, this is an attack on all of us.

Moreover.  See how much they are shrinking the financial freedom even with banks.  In the last decade everything went nuts.  Declare everything you own.  Prove where the money came from.  Prove what you have done with it.  We recommend card over cash.  Want to buy Gold?  Oops, there is a threshold for anonymity.  Want to buy Gold using your life savings after working for decades for our system?  We have to check your history first and label you a criminal before we clear your name out.  Use card and you get discounts.  Use card and you get free points!  Give up your privacy and we reward you for it.  Pennies worth of rewards, but you will do it anyway because this is how much you think your privacy is worth.  Freaking nuts, I am telling you!

As Bitcoin or Cryptocurrency users, is there any way we can oppose this?  Any way non EU members can help by opposing this law or does the voting and all happen among these fossil leaders and decision makers out of who most have no idea how Bitcoin even works?

-
Regards,
PrivacyG

You're just spreading FUD now. What do crypto fundamentals have to do with value? Bitcoin was never intended to be a speculative asset. Bitcoin's fundamental values remain unchanged even if its value drops to $1.


More serious than China banning crypto completely?

Privacy is a strange feature. As once you lose control of it it is very difficult to have it back.
In this situation, a compulsory read is the following essay from Giacomo Zucco:
 A treatise on privacy (https://bitcointalk.org/index.php?topic=5261713.0)

It enlightened me on multiple aspects of the subject.

                Bloodyhell, these people just never run out of things to do in order to satisfy their own agendas. These bastards just sugarcoats the crap they do and get away with it all the time. And just when mass adoption is increasing faster than ever before, this comes. What great timing of coincidence. Not everyone is great with techy stuff and this fact may slow the mass adoption down again. May even make existing crypto enthusiasts to bid farewell. This is really infuriating.

This was always their goal. Full KYC for every account, every wallet, every address, every transaction. Things like non-KYCed accounts at centralized exchanges are already fast disappearing. Either you submit everything to the authorities, or you don't. There are no half-measures; no middle-ground. If you don't want every single satoshi you own being tracked and monitored and recorded, then you need to stop using centralized services entirely and use bitcoin as it was intended - as peer to peer electronic cash, free from third parties.

EU citizens can write or call their representatives in the European Parliament, but whether or not that makes any difference is anyone's guess. The European Parliament strikes me as the kind of institution where the representatives care even less about the views of the people they claim to represent than national parliaments. As for people outside the EU, there is probably nothing you can do directly unless you want to pretend to be from the EU and email them anyway. Maybe contact exchanges which operate in the EU and ask them to actually fight this rather than roll over and accept it and sell out their users like they usually do?

It comes down to this: If the bill passes, each centralized service provider in the EU (exchanges, casinos, payment processors) will have to perform stricter KYC on their customers. Solution: Stop using centralized third-party services. It's that simple, but for many people the alternatives aren't going to be that attractive. How do you trade P2P in a place where almost no one uses Bitcoin and you need fiat? Bisq? Maybe.

Two things can happen:

• People will give in and accept this as the new norm because it's easier.
• We will witness a greater shift from centralized third parties to proper decentralized non-custodial solutions.

   
It's in human nature to take the easy route. Hopefully, there will be some resistance.

um yes they dont !approve" of things at the draft stage... instead they have "readings"


what you are now quoting. is not a "DRAFT"
https://www.europarl.europa.eu/doceo/document/CJ12-PR-704888_EN.pdf
its an amendment report 'reading' of the draft.. not the actual draft

this is not the draft. its just a subset of possible amendments to make to the draft

what you are quoting is not the full document with full explanation and detail. you are just reference only the chapters they want to change.

and no i doubt you even dared read the entire draft and then compared all referenced amendments to see how it changes the wording. i predict you just copy and pasted my exert of the draft to google search for it and then see its not the same link as your are looking at (your subset) and thought 'oh look franky is not reading what im reading'
well of course because i am looking at the whole thing to get the full context.

but it is now funny how you and your chums are NOW using the words "service providers" and trying to hide your previous opinion of "non-custodial wallets"

very revealing

and funny at times..
your buddy, trying to input some nonsense so that he can try backing up your nonsense
EG

sorry but here is the thing. its again not about getting unhosted wallets to obtain info.
its about service providers which act as payment services where the private key owner is not the service provider
take for instance, if an exchange had a cold wallet 'owned by a trust'(legally separate entity) where the exchange itself(their website/server) was just a 'watch-only' service seeing deposits..
the exchange still needs to KYC the customer...
this does not mean the cold wallet software needs to. nor does the legal entity 'trust' of the cold wallet need to

here is the actual wording from the amendments

why would they do this amendment.
to as i suggested. to stop exchanges putting their cold wallet into separate legal entities to pretend they are not a crypto asset service by only being a watch only service.
yep they thought ahead and closed a loophole exchanges could have used to pretend they dont handle funds so they dont have to KYC..
the important thing is that payment service providers are the ones required. not the private key holder

It seems to me that regulation of cryptocurrencies will sooner or later affect everything - exchanges, wallets, verification of addresses, and tax notices as a gift. The way out of this situation could be private coins such as Monero or others like it. DEX exchanges are already appearing and will begin to function well by then. Everyone will make their own choice, be law-abiding and have crypto ID or fight it.

There are two different drafts, mentioning the same thing, one superseding the other
This is the one from 2019 the MICA regulation, the same paragraph that o_e_l_e_o posted
52020PC0595 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593&qid=1648917382127),

Article 3
Definitions


This is the new one that simply further introduces MICA definitions to ICT directives
https://eur-lex.europa.eu/legal-content/EN/HIS/?uri=CELEX:52020PC0595&qid=1648917382127

Doesn't matter much.

I wonder where did he got this text from, it's not even in the draft report, because there is one big difference when it comes to a report, he mentioned:


But of course, he will find a way to weasel out of this, I wonder how pathetic it will be.


True about merchants accepting bitcoin directly, but there is still hope this will not be implemented even for third-party services.
You see, the "crypto-asset service provider" doesn't provide per current definitions those services to the customer, so at least till the current date as we speak, the customer is the merchant, all regulations apply to him, not to the shopper.
"on behalf the third party", this third party is Walmart or whatever Casino.

As long as MICA won't clearly specify through definitions and stick to the originator this definition is currently covered only in electronic money transfers and does not relate to any purchasing of services.

For your previous post about no exemptions:
https://www.europarl.europa.eu/doceo/document/A-9-2022-0081_EN.html

stompix.. the wording is clear.. it doesnt mention "customer"
so its not a "the customer is the merchant"

it says things like this (in the amendments document)

so the payment service treats the merchant as the "beneficiary' (receiver of funds and holder of the wallet)
and the customer(person buying a product from a merchant) is the originator (sender of the funds)

There are no customers because we're not talking about purchasing goods.
The whole thing is for financial transfers only, where the originator is the sender and the beneficiary the receiver, in financial sanctions there is no other entity other than the service provider.

DIRECTIVE 2011/83 is clear on this, there is nothing debatable here:
   

This is a unilaterally implemented directive, you can't go over this definition without first repelling this, and good luck trying to touch the Consumer Rights Directive, it's political suicide.

What is DRAFT saying about when someone is using multiple exchange addresses for mining, which is common practice. The miner will have to provide the ID copy of the mining pools owners from which addresses the coins are received, or what ??? These regulations are total madness!

This is sad for Europeans resident, it fast becoming some sort of war between government and crypto-currency (anonymity, security, freedom and privacy). This would definitely be a blow to every Crypto enthusiast out staying in Europe, and this is even an infringement on an individual right, I think we have that right of privacy and if I want to send payment anonymously it should not be restricted, well that goes for Exchange.
Correct me if I am wrong P2P would still work even if the ban is in place, like in my country where there is a ban on crypto-currency transaction, and P2P has been a route for many.

when you sign up to any exchange you are only allowed 1 account.(usually)
with this account you will need to be KYC'd
with this account they may provide you with 'use-once' deposit addresses and you can send funds from multiple addresses to the address currently reserved as your current deposit address

so if you have lots of coins from lots of mined blocks/sources. it does not matter because when you 'spend them' to deposit(request pool(s) to send them to deposit address) to an exchange the exchange will receive them and deem them as YOUR value

EG
mining pool A bc1qbladeblah \
mining pool B bc1qdeedeebla -  miners personal wallet -> exchange deposit address
mining pool C bc1qladeedade /

mining pool A bc1qbladeblah \
mining pool B bc1qdeedeebla --> exchange deposit address
mining pool C bc1qladeedade /

in both cases YOU as the exchange account holder are KYC linked to that account. meaning deposits into that deposit address are deemed as value assigned to you.. as you are the person thats deemed the owner of the funds

..
its the same as if you were arbitraging

exchange A<->exchange B

because you as the exchange account holder, of accounts in both exchange A and B
although the transaction appears to be a straight swap from A to B. they both deem YOU as the instigator/owner/controller of funds because you are the one making the service request for withdrawal /deposit

Thanks for clearing that out.

And what happens when someone sends coins from his own unhosted wallet to his KYC`d exchange account in order to exchange it to fiat? Has to prove that his won wallet is his own, or what?

Brian Armstrong - Coinbase CEO said that "Moreover, any time you receive 1,000 euros or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity."

This is true, plus that's just Europe and not the whole world. As someone who doesn't live in Europe, I do not care about what their laws about crypto is at all. To say that "crypto as we know it would be gone" requires the whole world to jump in on this, not just Europe. There are like 5 billion people give or take that doesn't really get impacted about this at all, nobody cares about this in that part of the world.

Only the European continent and the places that gets impacted by this would care about it. Which means that at the very very worst case (and not even that) it would only cause a "crypto as we know it would be gone in EUROPE" and that's it, nothing more than that.

Uhm, why are you acting like you are surprised about this? This news is not new any longer, it has been said over and over again in this forum and also on social media like Twitter. Most people are already aware that this situation is going on. Even Brian Armstrong warned the cryptocurrency community that if they don’t want to face the tough level of regulation that is coming this time around, which is going to kill off the privacy of Bitcoin, then they should all switch to decentralized or non custodial wallets.

As long as you continue to make use of centralized exchanges and wallets, then you are ready for this. If everyone are going to switch to making use of decentralized platforms, or peer to peer, then it would be very difficult for the government to achieve this, they would be left with no power.

exactly, who cares EU Parlament!!
I don't have time to bother about them.
If they made changes then surely only they and their people will suffer for their shitty decisions.
The whole world will follow the basic crypto rules "not your key not your coins"
I think people are becoming very jealous of Bitcoin. They have no idea what decision they are making! This is not a good thing at all.

1. no you dont. you wanting a deposit into the account deposit address is you having those assigned to you. they do not need you to prove every deposit is yours... you wanting/have a deposit put into your account deposit address is you already linking yourself to that deposit.
in short nothing else is needed if your already KYC'd by the exchange

EG


2. they have to keep logs of all deposits and trades/swaps within their service and if the authorities request it then they have to provide that info to the authorities.
or if the service deems it to reach a certain level of suspicion, then the service decides to report it.

basically if the authorities request the info, give it. or the service only gives info that they find highly suspicious that is worthy of reporting. it does not mean everything gets reported

EG

this one part alone both tells people that the EU are not requesting that blockchains should make users info public on the blockchain (a silly idea certain people propagandised months ago)

ill also quote this that clarifies they do not want the crypto software/ wallet software to send the info

and also states the "made available" in many exerts .. ON REQUEST to the authorities.. so its not a "report everything"

if it ever was a report everything. then every single market exchange every deposit every withdrawal would be reported and basically flood the authorities with nonsense stuff..
they only want the interesting reports that are suspected to be linked to crimes. they dont want to be flooded with everything. and thats the reason why they get service providers to have compliance officers and investigators and such. to weed out the boring from the interesting.
if they just wanted everything. they would not need all these trained employees within the service providers business. they would just ask for direct access to their database

there are other things. like

the 'determine the appropriate follow-up action to take' references things like if the service should raise the flag to a potential need to report it to authorities.
in short its not a defacto 'report everything'

in short. they do not blanket ban users for using a mixer or freeze the account or refuse withdrawals or report them automatically/every instance. the service provider has to assess things case by case. and with other EU directives they should only really refuse withdrawals/access if done via a court order to seize funds.

heres another little nugget to clarify certain peoples false assumptions of how MSB's work
if a user refuses to give info. the service provider cannot defacto just seize the funds and make the customer at a loss just for not providing info.
instead the service has to have procedures to not seize.. but instead suspect certain service features or offerings like access to the market order book. and offer a refund mechanism to return funds to the customer to then close their account..

many unregulated(crap services) actually pretend they have the right to keep funds by asking customers for extraneous things which they know the customer will refuse to provide and pretend that triggers their ability to keep funds(steal funds actually)

Agreed hehehe. The problem with this is those people creating the laws do not or have not thought on how to enforce them. This will be a complicated problem and the paperwork for this would be enough for them to give up on many cases. It will be a problem for the users only during the beginning, however, similar to many other laws they cannot be enforced to the fullest extent. There will still be users who will still enjoy their privacy in the cryptospace.

It doesn't matter much but the text from which he extracted this information is that one, Annex IV – Minimum capital requirements for crypto-asset service providers. Just use ctrl+F and "EUR 50,000" for example.

The fact is that this text, article or whatever we want to call it, was not approved.

Regarding franky1, I have put him back on ignore, and I will not take him out. Nothing personal against you franky1, but I don't feel like arguing with you forever.

I strongly agree with NeuroticFish here.

The optimist in me always likes to think that these laws will cause people to get their coins off exchanges, get open-source software and hardware with verifiable builds and start transacting much more amongst each other in a somewhat 'circular, Bitcoin-based economy' kind of way. If needed, P2P exchanges such as Bisq can be used as on-/off-ramps, but even if those were somehow shut down, Bitcoin mining could become more attractive again.

Honestly, what sounds more like 'the Bitcoin satoshi envisioned'?
This (somewhat what is happening often nowadays - 'coin' because I speak of cryptocurrencies in general)

• Coin bought in centralized exchanges
• They are stored on the exchange for easy and quick selling
• Coins used as mere object for speculation
• 'Staked' on exchanges to 'generate profit'
• Nobody mines at home
• Nobody runs a node
• Software clients are closed-source
• Coins are tainted and only 'legal coins' accepted

Or this?

• Coins are acquired by mining at home
• Stored offline in open-source and / or DIY devices
• Coins are used for paying and being paid
• Miner generates profit
• Everyone runs their own full node
• Software and hardware is open-source
• Coins are fungible and everyone accepts all UTXOs

If they really go hard against hardware wallet companies for instance, I would quickly switch to DIY projects such as SeedSigner (https://seedsigner.com/), Krux (https://bitcointalk.org/index.php?topic=5350905.20) and my trusty Washer Backup (https://bitcointalk.org/index.php?topic=5363596.0) (I'm so happy with this that I won't buy another seed plate product again, pretty sure about this. :D)

However, the Wallet Scrutiny (https://walletscrutiny.com/?verdict=all&platform=hardware#tableofwallets) 'verifiably built' firmwares should be good and in a world with ever stricter laws, I can see myself just start verifying them personally before each and every firmware update.

That's wrong. Non-custodial means you are the only one having access to your own seed words. Once you've backed them up and nobody else has access to them, what do you care if the application stops working? Install another one, import the seed and you're golden.
I also strongly believe that open-source is an essential element of basically anything in this space; this will allow you e.g. to fork a manufacturer's source code and compile it yourself, if they have to shut down due to legal pressure. Or if they have to remove functionalities, you could add them back in from the commit history for instance.

Obviously, the latter sounds more like what Satoshi said, but in many cases an invention ends up being different in several ways from the original idea of its creator.

Today we have reached the current number of users and the current price among other things because of centralized exchanges, demand from companies and government regulations. How many people would use Bitcoin today if it were banned worldwide? And what would the price be? I think it would have a much smaller number of users and a much lower price.

If Bitcoin were used exclusively P2P, it would be a thing of a few cyberpunks, and events like, for example, legalization as a currency in El Salvador, would not have happened.

I'm confident that that is PRECISELY what a world under the CBDC-system will look like. There is a saying that "if you control a nation-state's money, you control the nation". That's where the real power resides. Bitcoin's underlying nature takes away some of that power. The government's response is to make criminals out of you. OK, but I'm also very confident that some users would rather be "criminals" than give back some of the freedom that they have won back through Bitcoin.

So for the already KYC`d accounts there is no practical difference now and then !?

We could all use some education on how to use the ledger and the trezor without their platforms. The

Even if one starts to use the hardware wallet without their platform, I guess having even once used the platform means that their servers can easily connect that address with the said device delivered to a particular address and customer?

So that renders the whole thing traceable forever I guess. I would be happy to know if someone can give information to the contrary.


These moves aren't exclusively aimed at bitcoin nor have been provoked by them. Most of this has come to pass with the growing volume of trades and transactions that are happening on smart-contract platforms and the millions being moved in NFT sales. When only Bitcoin was being used, most transactions would have been smaller P2P ones. Those on Ethereum and these other platforms with VC money are huge and have been leading to a lot of people getting scammed and losing their money, OR, in a lot of other cases people making a lot of money without having to pay taxes.

I doubt that the nation states cared till it was just people losing money to scammers. Since every kid in the basement is starting to make 1000s of dollars with NFTs and wallet farming, they don't seem to be very comfortable anymore.

I use my Ledger with Electrum using my local Electrum server linked to my own Bitcoin Core (yes, it means 425+GB spent for that). I even wrote a tutorial for it (https://bitcointalk.org/index.php?topic=5367296).

Of course that if you've used their wallet, your addresses will be traceable, at least the first some (10-20), so best is to reset to new seed.
And of course that (especially in case of Ledger, since it's closed source) one doesn't know 100% sure his addresses are not tracked even if he resets it and never use the wallet part of their HW platform (since the info may be already leaking at firmware updates or installing the bitcoin app into the HW). You can follow my answer here (https://bitcointalk.org/index.php?topic=5391971.msg59737063#msg59737063) and maybe that whole topic.

Bad attitude to have. The US are in the process of passing similar laws. Now the EU. When two of the largest crypto markets in the world move in one direction, then most companies will follow so they can continue to operate in these jurisdictions, and many other countries will fall in line with similar legislation. This will absolutely spill over to other countries.

With this legislation, every transaction you make via a centralized exchange is reported directly to the relevant authorities in your country. So I would expect a lot more cases of people having accounts locked or coins seized pending some nonsense investigation because some sketchy blockchain analysis has decided that you might be a criminal.

This is the critical step. Storing your own keys, running your own node, using open source software, mixing your coins, etc., are all trivial. Being able to spend your bitcoin without going through the fiat system is that hard part. I don't want to sell my bitcoin for fiat and then spend the fiat, I don't want bitcoin debit cards which sell your bitcoin for fiat at point of sale, I don't want to have to buy gift cards first, I don't want to have to go through some third party processor which swaps my bitcoin for fiat at the point of sale. Although I do some of these things to let me spend my bitcoin, what I really want are merchants which accept bitcoin directly. Give me enough of those, and avoiding the fiat system entirely becomes easy.

Let us face reality.  Most of those who not mind intrusive Know Your Customer today will not mind Know Your Transaction either.  I know my friends who do not mind Alexa listening in every single room of their house would not mind it.  They prefer five minute two click trades and instant website loading rather than running Bisq, syncing headers and all taking up to hours to do a trade.  And who cares about privacy today is using non custodial wallets and running their own node.  And in the event of Know Your Transaction becoming the 'next step', they will only continue to find alternatives.

It is why I am not as scared about this Know Your Transaction law as others may be.  At the end of the day, I am still going to look for ways to cover my footprints and thanks to Open Source and Decentralization, we are at that point where we have ways around mostly everything.  But I will always get mind freaked thinking how well they shaped up our brains over the years to accept invasive laws and corporations, even PRAISING them for what they are doing with our data and mind.

-
Regards,
PrivacyG

At the moment, this legislation will have no direct impact on me since I do not use centralized exchanges and I do not live in Europe. But as I was just saying in my last post, this kind of thinking and this kind of legislation will absolutely spread around the world. There are similar pieces of legislation making their way through the various processes in the US and in Canada, and I'm sure plenty more elsewhere I am unaware of.

I will never stop doing the things I do to protect my privacy and prevent the government from including me in all their mass surveillance programs, not just when it comes to bitcoin but in all aspects of life. But there is no doubt that such legislation will make it more difficult. It will be more difficult for me to spend my bitcoin with any merchant who does not accept it directly (i.e. via a payment processor). Even merchants which do accept it directly may make things more difficult if they in turn start getting harassed by exchanges to show where their coins came from.

Obviously I'm hoping for the opposite - that more people wake up the draconian suppression being forced on them and the volume of peer to peer trading massively increases - but given how little people seem to value their privacy or freedom, I'm not holding my breath.

We all knew this would happen. Either this or a compete crypto ban. This approach is more preferable probably.

I wonder though, where does that put XMR? I guess it doesn't make a difference as long as you use an exchange and as far as I know, more than 90% of the crypto people do use exchanges. This law converts every exchange into a crypto bank.

the law involves MSB(money service businesses) basically exchanges and services that do KYC anyway when they also handle fiat.
so it has little to no impact on them

already assume that when you use an exchange to convert to fiat. your details are already being logged by the exchange and they are already looking for red flags to report you.
they are already logging your sign up email and IP address, and funds from same UTXO being split and then deposited into multiple accounts.
they already do this to look for red flags like duplicate accounts. (to ensure people are not trying to circumvent the min limits of KYC)

the law does not affect people sending funds to other people(peer-to-peer) without middlemen
its not about requiring hardware wallets or software/nodes have KYC implemented into the code by law.

they have made it clear that the KYC info that MSB(service providers) should request should be separate from the transaction and requested from the customer not from the software, and should be obtained and verified as a separate thing

what it does do however is clarify that anyone being a payment processor for a fee. (yes altnet routers, you will be classified as a MSB!!)

what i find the most amusing is that a certain group of people that love an altnet are trying too hard to tell people to stop using bitcoin stop exchanging bitcoin (thus trying to crash the price) and then trying to advertise their altnets as a go-to thing pretending they will be safer to atomic-swap to stablecoins
even though if you read the legislation of both EU and US . those altnet lovers offering routes for a fee or atomic swaps for a fee will be classed themselves as MSB's and have to register and be regulated

yep, im amused that they are not crying about how its going to affect their own activities of their favoured altnet. they seem a little tooo busy trying to get people to use and buy/sell bitcoin less

.. here is something those people need to learn really quick about DEX and also altnet routing/atomic swaps. you might think tor/vpn/proxies will hide you.. DreadPirateRoberts thought the same until he was caught. but when your bank is seeing you do wire transfers to dozens of random people each day when you do private exchanges for fiat. your bank will suspect you are running an MSB(many localbitcoin operators thought they were safe, until they were not)

Wow, this sounds real bad; worse than the first page of the thread indicated. I stand by my assertion that it could just push us more into what Bitcoin was and how it was envisioned, but it will surely have negative side effects such as being harder to use without compliance to these inhumane measures and potentially affecting the price.
Though I believe the uneducated 'Bitcoin as an investment' cex-lovers who don't care about KYC and AML won't care much about this either. Heck, they don't transact with Bitcoin, so it will affect them the least & as long as trading goes on and people continue to invest in Bitcoin, even if just 'as an investment', the price shouldn't drop.

They say "necessity is the mother of invention". It is very clear from bitcoin paper that there was a necessity for a payment system like Bitcoin that led to its creation.

We also saw that DEX becomes a thing whenever a big CEX starts showing problem signs (either shuts down, scams, gets hacked or forces KYC). But unfortunately something else usually comes along and puts all the effort into sleep (to some extent). For example when the existing big exchanges at the time like Bittrex and Poloniex started showing shady symptoms Bisq gained a lot of popularity then Binance came along without KYC and it gained traction while Bisq volume went down and remained unpopular (in comparison to CEX).
I believe the more they push it, in short term we could see some disturbance in the market but in the long run we will see more decentralization coming out. It also may not be a bad thing to purge some of the weak hands who were only holding bitcoin for fiat profit.

Governments trying to have full control over every aspect of everyone's life is not a new thing either. They have also been pushing for restrictions on CEX and everything else surrounding bitcoin for ever. The more popularity bitcoin gains the more alarms it will raise for those in the seat of power! But it has to be met with resistance, if everyone just rolled over we would have never had bitcoin.

"Scalability isn't important until it suddenly is. Decentralization isn't important until it suddenly is. Privacy isn't important until it suddenly is." — Some random Twitter guy.

There are two scenarios. One's that privacy suddenly becomes important, people dislike this situation that comes from these strict regulations and educate themselves. Peer-to-peer trading increases, centralized exchanging decreases and so fourth. The second is that nothing happens. People simply choke this down and move on their lives, in a more regulated manner, which sounds much more probable.

This ignorance of the latter reminds me of how significant it is to have privacy on a protocol level.

Sure, but look what's the difference. Having Bitcoin is not the same as using Bitcoin. The former is like a "revolution from the sofa" while the latter is what's resistance needed for. And, even if it sounds pessimistic, I don't believe that people will rebel for their privacy. Yet, most don't even rebel for their debt-based money.

Which makes it all the more disgusting that exchanges and many other big players in the bitcoin ecosystem put up zero resistance to these kinds of changes, or even help them along. Centralized exchanges have always been in bed with banks and governments, willing to sell out their users for any profit whatsoever. The most opposition we have seen from this bill was a half-hearted email from Coinbase telling its users to take action themselves, while taking absolutely no action themselves. No campaigning, no lobbying, no funding a resistance. After years of selling out their users this is the best we can expect from them.

There was AOPP from a few months ago which a bunch of supposedly privacy respecting wallets were more than happy to jump onboard with until it seemed it was going to cost them some customers. And then we have Wasabi wallet becoming pro-censorship and anti-privacy of their own free will, well before any legal requirements or lawsuits forcing them to do so.

Privacy and privacy respecting software is harder and harder to come by. Every inch we give we will never get back. No piece of privacy invading legislation will ever be revoked. EU citizens should be fighting this now.

  MBS -Exchanges sooner or later will care more  about privacy coins or their business model will die.  Cryptos like  Grin No adress ,No amounts seen is only way to go. Fight or fly.

If this will be implemented as described, I'm interested to see the bookkeeping required to enforce it.
Just Bitcoin is currently doing roughly 250,000 transactions per day, and they will have to somewhat manually go through all of them to check for 'illicit activities' and that all of them are somehow linked to a real-world identity of someone. Right? Then add on top of this all the 'fast blockchains' such as Ethereum.

What I find interesting is that Kraken recently implemented Lightning. I am not saying that LN is 100% untraceable, but it does make things a lot harder. Sure, this bill is a legal thing that stands above anything that we can implement on the technical side, since it can basically state 'we won't accept your deposit (LN or not) if you don't provide full KYC and believable origin of fudns'. But on the other hand, there is no 'KYUTXO' because LN has no notion of UTXOs. Also I don't get how they want to handle Monero, since the transactions aren't public. Will they just ban it? Many open questions.

I really hope that as well!

This is very interesting. I assume Bitcoin wasn't banned from the start; so did you experience major changes in how cryptocurrency is perceived, used and handled in every-day life after the ban? Was P2P popular in your country before and how did the ban affect it? Which platform is preferred / go-to choice for those P2P trades?

I'd agree that centralized entities have helped people to get into Bitcoin more easily than having to find users P2P who'd sell them some of this good stuff. But for one, a worldwide ban is completely off the books here, right? This is a EU thing to fully be able to track payments, not a ban. And even if; honestly, Bitcoin is P2P money. It's not meant to be in the same system as banks and similar service providers. I like to compare Bitcoin to P2P file sharing through Bittorrent. No matter how much centralized hosting providers, movie rentals and software vendors hate it, it continues to work and chug along.
I don't know if only cypherpunks would use Bitcoin if it were to get back to its P2P roots; that remains to be seen, but I don't think so.

Couldn't have said it better, that's the spirit! What we can do is let merchants that we frequently use, know that we'd like them to accept Bitcoin payments directly. It starts with companies selling 'Bitcoin products' such as hardware wallets.
Personally, I've always considered moving to a place with better privacy laws in general if / when the current place gets too bad.

I don't think Bitcoin over Lightning Network will be looked at any different from first-layer Bitcoin. If a service provider accepts crypto payments, nothing changes. You will still be able to do your thing without KYC. If the coins get converted to fiat, third parties are required to request KYC, no matter what asset you use to pay. I hope exchanges will notice an outflux of users, but I remain skeptical. Centralized services will think of some new offers, give out some free coins or airdrops, and the majority will be happy to go along with it.     

I understood the proposal a bit different: for every transaction to an exchange/payment processor/other service provider you have to provide the identity of the sender, but only if the transaction is over 1000 € it must be reported automatically; however, the information must be transmitted by the service provider to the authorities "upon request", and there are other cases where a report can or should be sent by the service provider (if it's suspicious to be linked to criminal activity). I agree however with the second part - definitively, there would be more cases of blocked/seized accounts.

I forgot if it already was linked here, but this is the current draft proposal (https://www.europarl.europa.eu/doceo/document/A-9-2022-0081_EN.html#title1). I'm referring to article 16 (4a):


To answer KevinMiles' question, I would say: For people who don't transact large quantities of crypto and already are KYCed, not much will change. But if you make a living with crypto, above all with trading, arbitrage and the like (which often will mean transacting large quantities) life will be more difficult and you should be very careful about segregating wallets and really evaluate thoroughly the services you use. For example, don't combine EU-regulated exchanges with small "unregulated" altcoin exchanges or DeFi apps; and if you want to use them, segregate regulated/unregulated funds strictly.

A point which came up in a discussion in the Spanish forum is the consequences for Lightning, which can have also problematic aspects. Private and non-commercial LN nodes should be safe, but for example EU exchanges which also are connected to Lightning (like Bitstamp) could have to restrict the node to their own customers (i.e. they could be used for deposits/withdrawals, but _not_ anymore for "supporting the network", as they would have to identify all senders/receivers of the transfer they route which is obviously unfeasible).

nope. the MSB(exchange/service provider) has to locally log everything.. with the potential to use analysts and compliance officers employed by the MSB to use their minds, eyes, hands and algorithms to check for suspicious activities. where by if something reaches a certain threshold of suspicious activity of suspected illicit crimes (laundering/hacking/terrorism/tax evasion) THEN it is passed onto authorities

its not a default 'report everything'
if an MSB has 5million users that do 5 transactions a day..
the authorities do NOT get 25million reports a day!! FACT
if 1% of an MSB's users do suspicious things. the authorities might get (0.5%) 125k reports a day, because there is actually a suspicious activity threshold that needs to be met.
this is why MSB have to employ compliance officers and data analysts and have business policies of best practices and train staff.... rather then just a 'forwarding' portal of their entire database to authorities

funny part is certain people are asking innocent users to now use 'mixers' before depositing into an MSB. guess what. that MSB will see the mixer and immediately red flag it as suspect of laundering.

yep sometimes trying to be too careful by giving false iID and mixing, actually makes you more noticeable and worthy of looking into more.

analogy
its like oeleo's/blackhatcoiner's favourite hobby. stalking people.
(second hobby is being the worse ever door-to-door salesmen of an altnet)

by crouching down and hiding behind bushes to hope to not be seen.. the neighbours notice a strange guy sneaking around and report him to the cops.
if he simply walked along the path, standing tall and just followed his victim.. no one would bat an eyelid and no one would be concerned.

EG (watch a genuinely good spy movie)
do you think spies crouch down and hide behind bushes. no. their stalking is less noticeable. they hide in plain sight by not hiding.. by just acting like a normal person taking a casual walk

however oeleo and blackhatcoiner are promoting practices to get you more noticed and flagged as suspicious
their game is to get people reported to then pretend the person got reported because the MSB is over-reaching..
reality is this
yes MSB log details and have a X year statute of limitations on how long they can keep that info. but if you are doing nothing suspicious. the authorities never get a report on you and that data gets deleted after X years.
however do things like use mixers and give fake ID 'to preserve privacy' will get you flagged by the MSB they will look into you and investigate you and decide if your worthy of being reported

Reminds me of the guy who claimed to have a trading bot set up to trade constantly all day long with a target of zero profit, just so he could send thousands upon thousands of meaningless trades to the IRS and force someone to waste their time going through it all.

I imagine they are approaching this the same way the approach most of their mass surveillance programs. Mass surveillance isn't used to prevent crimes, terrorism, etc. Mass surveillance is used to control the general population. Far more people use Bitcoin than use Monero, so it becomes the prime target for mass surveillance.

Looks like you are partly right. On closer examination though, it isn't that individual transactions can't be over 1000 EUR, but rather if that person has received over 1000 EUR across all transactions. This gives you a deposit limit of slightly over 0.02 BTC at current prices before you are automatically reported to the authorities.

I believe that's where some of us might be wrong. In believing that the government is doing this for the prevention of plebs from being scammed. No, they're doing this because MASS ADOPTION of Bitcoin could mean death to their political strongholds. They didn't understand the underlying nature of Bitcoin until it was too late. The Pandora's Box is open, the government is merely trying to close it.

Nonsense actions always leave unaddressed concerns. Take for instance the Russian address blacklisting from Coinbase. Governments are perpetually trying to figure out ways to control their citizens no matter if their actions are reasonable or not. But as a wise man once said,

The power abuse comes from the impression that you need them for almost everything, especially their money. This aggressive behavior is on years now, as pooya87 has said.

As for Monero, it wouldn't surprise me if they required from centralized exchanges to hand out the customers' view keys, if any does accept it anyway; I thought we had baptized its usage as criminal offense. Notice that these actions bring into the open how faulty it is to rely on a third party.

Something tells me that those who do use it and aren't into it to make a quick buck will sooner or later rise in percentage, and along with it, the P2P exchanging necessity might emerge consequently. Is it currently a period to be hopeful or not, I wonder.

Yup, I had read about it, too! Reference, for anyone interested.. (not sure if real, though):

https://i.postimg.cc/hj1vP9wd/image.png
This seems like the only cleartext source for this - I had seen it as a screenshot elsewhere. https://boards.4channel.org/biz/thread/47561034/i-have-a-bot-running-247-buying-and-selling-for-0

Makes sense, indeed.

Well, like the op rightly said, it's expected, and at least, this puts an end to the unreal believe that bitcoin and cryptocurrencies are above governmental regulations, it's evidently clear now and I honestly feel indifferent.
I personally don't have a problem with them knowing my wallet address or addresses but what I will feel so sad about is if they have access to my wallets(even though its decentralized) as it is with my bank accounts, if this should happen, then maybe decentralization should be taken out of English dictionary cus it failed to exist.

Anyways, I wish this is never passed, but if it's going to be passed, it should take great many years.

Bitcoin is indeed above government regulations, but each country or government has its own rules or regulations. The government will not fully regulate Cryptocurrency they only regulate the entrance but not for the inside. Don't worry, your personal wallet will still be decentralized and only you can manage it, because you own the private key.

as long as you don't publish your personal wallet address, everything will be safe.
stay away from exchanges that require KYC if you really don't want to be exposed.

I am in the EU, and in my country they have solved it in a way that regulatory agencies have asked all local crypto exchanges to remove such cryptocurrencies from their offer - and they have done so. I see no reason why this should not be a model that others will not follow

---

In an attempt to remain ostensibly democratic and not follow in China's footsteps, they have been doing so for years - just look at what central bank governors are saying. Now that they see that the thing has gone too far, they will do everything to make Bitcoin as uninteresting as possible for all those who already own it or have planned to do so.

In the recent news that Thailand has banned cryptocurrencies as a method of payment, one could read the explanation that they do so in line with what is happening among others in the EU. It seems to me that they all read from the same manual, the only question is how quickly they will implement some things.

So far it is true, they can only do that and can't seem to manage beyond that. So far I feel optimistic that Bitcoin will be even more profitable because the government has opened its eyes to regulations and even collect taxes. Even if in order all transactions can be tracked if ever transactions on exchanges and banks in the form of fiat. In fact I have read if the BTC Mixer service from Coinjoin has also provided support for transactions suspected of money laundering.

We have to realize that IRS is not responsible for all the trouble we are going through, neither is the person who would go through thousands of papers, a pallet of papers really. That is not responsibility of the person who is working on it.

This is like going to some Sony retail store and making life miserable for some worker there, the CEO of Sony would not even know you exist, they wouldn't care about who you are and what you do, they do not know about their own workers neither, they won't mind and you can do that forever and it would not change their life. It would be the retail worker whose life you are screwing.

Same here, whoever is hired to do that job, go through a pallet of papers, would hate you, but the ones who put the law there wouldn't even care, they wouldn't even be aware that a problem like this exists so it doesn't change anything at all.

The imprecise way the passage is formulated, it could be interpreted this way (which is problematic). However, from the other parts of the proposal I read, the "1000 € limit" seems to apply to 1) single transactions and 2) transactions which seem to have been splitted to evade the limit, like it is already common when judging if such a limit was evaded with bank transfers.

There is also section 33a of the "whereas" section (the summary at the start, I don't know how these sections are called "correctly" in English):

(Source: Current draft (https://www.europarl.europa.eu/doceo/document/A-9-2022-0081_EN.html#title1))

The "a transfer" I highlighted is an indication for me that they're indeed talking about a single transfer.

However, the whole part is so imprecisely formulated (it looks like a last minute addition) that if left unchanged it will be probably up to the courts to decide what was meant, and it's possible that some of them would prefer the interpretation you made - that all transfers from unhosted wallets are accumulated (regardless of the moment they were sent) and it must be reported even when there is a single 1 €-transaction which exceeds this limit.

The latest news info - UK wants to be a crypto hub and plan to exploit the crypto potential, what about EU - did they still want to commit a crypto suicide with their overregulations? I guess will soon find out?! UK probably made the right choice leaving the EU.

Putting in context everything that has been discussed in the thread, we are in a global context of reduction in the use of cash voluntarily by people, who prefer to pay with their cell phone or smartwatch, and the governments are smiling thinking about cashless societies in the future, or with cash replaced by CBDC, whose essential difference with cash is that governments can know what you spend all your money on.

Bitcoin and later currencies like Monero appeared as an alternative to fiat, but if laws like the draft we are talking about are implemented and measures like the one Lucius mentioned regarding privacy coins are taken:


P2p trading will be pretty much useless for the acquisition of goods and services. I think the original idea of Satoshi, and those of us who have dreamed at some point of mass global adoption, would be to be able to spend Bitcoin, perhaps with LN or some other system, in the future for the things we spend fiat on today.

But with these legislations, even if we can acquire some goods and services, the most basic necessities we are not going to be able to acquire without KYC. Ideally, with a Bitcoin-friendly government, a threshold could be set below which no transaction reporting or KYC would be required, for example $100 (I remember reading this idea from o_e_l_e_o), but as it turns out, it doesn't look like this is going to happen.

Let's analyze which of the basic necessities we could pay in the future without KYC:

1) Food. We have all at some point dreamed at some point in time of being able to pay at Walmart or equivalent in the future with Bitcoin. If that ever happens, it will be with KYC. Regarding the number of transactions discussed above, I believe that the IRS will simply use software.



I understand that just as you can set up a trading bot you can set up a program that analyzes the reported movements.

2) Shelter. Forget about paying a mortgage with Bitcoin or paying directly for a house if you have sufficient funds in Bitcoin without KYC. Maybe an undeclared rent, with the potential problems it could cause, we could pay it.

3) Clothing. The same. If you know someone who has a small store and is a bitcoin believer, maybe they will accept Bitcoin payment to buy clothes from you, but it is highly unlikely, because there are going to be fewer and fewer small businesses of this kind left.

4) Transportation. The same. You can maybe buy a second-hand car to a P2P private individual, but nothing more.

Conversely, the end of that sentence - "from unhosted wallets" - suggests they are talking about multiple transfers, rather than saying "from an unhosted wallet" if they were talking about a single transfer. As you say, it is open to interpretation, but my experience is that generally lawmakers will interpret things in the way that gives them the most power and gives citizens the least freedom.

I think the initial point I made regarding a lower limit was for tax purposes. In the US, when considering foreign currency then you do not pay capital gains on any transaction below $200. Such a limit would immediately make using and spending bitcoin as a currency far more feasible. Rolling in the reporting requirements to this as well as you suggest would also be beneficial. When considering the travel rule for fiat, the limit is anything up to $3,000, or the equivalent in another currency. I'm not entirely sure what the limit is in the EU, but the report we are linking to here seems to suggest it is 1000 EUR. Fairly ridiculous, all things considered, that there will be a $0 limit for taxing and reporting bitcoin transactions.

The thing is, bitcoin is not going anyway. If the EU wants to be hostile towards it, then the EU will simply fall behind. And in another 20 years when other countries have huge cryptocurrency sectors built on personal freedom and non-stifling regulations, then the EU will have to play catch up. Their loss.

Is it just me, or is this entire topic completely ass-backwards?  You can't lose what you never had to begin with.

If you've used an exchange, you lost your privacy the moment you handed your money to someone else to hold for you.  Total strangers you've never met, or even knew the names of, became acutely aware of you and your wealth because you literally gave it to them.  When you withdraw your funds, they can follow the trail.  And then some of you started attaching your real world identities to this wealth, because they asked you to and you were too indoctrinated to say no.  You said goodbye to privacy a long damn time ago.

This is your opportunity to finally learn what privacy really is.

I've been working under the assumption that centralised exchanges have been on borrowed time for a few years now.  Which is why I've been staying away from them.  It was always reasonably likely that things were going to turn out this way.  Ultimately, I think it'll be healthier in the long run if fewer people use custodial services like that.  It was concerning to me that so few people actually saw a problem with the amount of trust required and the amount of privacy surrendered, so if people do suddenly feel disincentivised to rely on third parties, I'd say it's about damn time.  It's kinda the whole point of what we're doing here.  

Welcome to Bitcoin.  It's nice to finally have you on board.  Get your money off the exchanges and allow them to wither and die already.  We can do so much better.

Sorry but that's just daydreaming.

Other countries will build something only if it rewards them financially, all businesses in crypto do this only for money, you might not like it but right now that's what 99% of the whole system is about, businesses and authorities will not invest money if there isn't something to be gained from, which usually is more money.
And more financial freedom and more money in taxes are simply contradictory situations. I've seen a lot of those things on how countries will have x and y and z to lose if they become hostile to bitcoin, as a country (we're excluding from this personal finances) what do you have to lose from this, assuming the whole of Europe completely bans crypto, from the government's point of view, and income in taxes, what do they lose? Let's be honest about it, all of us praise the way BTC helps us avoid fiscal control, it's not like crypto businesses are paying billions in taxes, and the money they spend on other things, it's not money made out of thin air it's from people who have invested their money that would have ended being taxed anyhow.

Do you see China falling because they've banned bitcoin?  Why? Won't they be able to produce smartphones, clothes, teacups, or raise pigs because of this?
We're still talking about what Satoshi thought bitcoin would be about and I've never seen a paragraph on how countries that will not adapt to this will crumble to ruin nor how this p2p will revolutionize state affairs.

For me is quite interesting how at the same time people lean towards total libertarianism but at the same time they are trying to bring the authorities into the picture, and in all this mess, despite being willing to go to extreme lengths to cut their control and say in the matters they somehow manage to find a scenario where this will reward them for nonimplication. How that is possible, as I asked you before is beyond me!

Again this is about countries, not about individuals, that's a whole other thing, individuals for example can move, but I'm yet to see a single forum member moving to Salvador to take advantage of taxes or freedom or opportunities. And that is mainly because 99% of the individuals in the world don't really care about 1-5% in taxes as much as they care for something being convenient and not requiring clicking more than two "I accept" buttons, 1 million will take a photo of their ID, 100 will think about installing bisq and one will actually do.

I know it doesn't sound nice, but I know everyone knows deep down that's what's happening, it ain't going to be a utopia as we're heading full speed to one hell of a dystopian future


Why do they have to do something about it? The community is doing this for them at no cost, monero capitalization has dwindled compared to BTC from 1:40 to 1:200, give it a few more years, and you're going to see people asking if Monero has NFTs  ;) When Metaverse!?!


Not if it's more than 10k, all transactions over 10k in value, you will either need to find a buyer willing to fake the value of the car in the contract or make a multi-payment contract, not that many who will agree on it.

You can't compare countries of different regimes and expect to make a proper conclusion. If the pigs administrate their economy, last thing they'd want is uncontrollable, censorship-resistant money. Also, who says it's banned? All I know is that they've forbidden mining.

Perhaps because there are hundreds of other reasons one won't leave their country?

I wouldn't say all those who use Bitcoin are libertarians with emphasized ideals etc. Most are probably conservatists who just want to make a few bucks and pretend to support this libertarian movement. However, the hypocrisy, if you want, of the latter does favor the former.

They say:
http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4348556/index.html
It's about time we get over it, China banned first ICOs, then exchanges, then mining, then financial transactions, then domestic use, there is nothing left that can be banned anymore.


Exactly my point, people will always think of balances, and you can see pretty well all around you that those willing to make sacrifices for ideals can be counted pretty easily using one hand. Yeah, privacy is nice, yeah it's nice to have freedom, but wait till you reach the stomach area.  ;)
Why is 90% of this world going to a shithole if not because of people thinking short-term and about their won issues first?


Of course not, if everyone would be a real libertarian we wouldn't be in this mess right now, we wouldn't have a ton of centralized exchanges, we wouldn't have all these hype projects with no meaning but at the same time we wouldn't have any talks about regulations at all or any desire to do so. And I doubt even the conservatism move has more followers, if I would have to nominate the biggest party around now it would be "My wallet to Moon" faction.

Withdrawing taxes on cryptocurrency users will certainly increase the income for the country. it only takes time, Bitcoin or cryptocurrency becomes an important part and becomes the future transaction technology. The regulations given by the government will not be complete.
A lot of positive support has come that makes transactions in cryptocurrencies even better, as you said about the Bitcoin Mixer Coinjoin transaction which is willing to open its user data for those who are indicated as money laundering. But this will remain private.

Well, Bitcoin allows to send a (single) transfer to a wallet from several unhosted wallets  :P

But of course I don't really believe they meant that (I doubt one of the EU parlamentarians knows about SIGHASH and the like, maybe Patrick Breyer (https://en.wikipedia.org/wiki/Patrick_Breyer) or these three MPs (https://en.wikipedia.org/wiki/Czech_Pirate_Party#European_Parliament)). I generally agree with you here, but I have hopes the final document will be a bit more precise.

In the last weeks I stumbled upon several businesses I would never thought of that they would receive bitcoin but they do now - mainly a medium-sized (registered) car selling business and a big holiday complex.

Food however may be difficult, as the amounts spent are generally so small amounts that if some supermarket bothers about accepting BTC it will almost certainly use a payment processor which would then require KYC.

Generally, a popular P2P ecommerce platform like OpenBazaar would help a lot with most of these things, as it would show supply and demand more directly than if you have to search each business in the web. I really hope it gets traction again, although for now they're going through difficult times and are barely used.

Pretty much this. There have been some that have been able to skirt round the edges of regulation, and some users who have been able to use accounts without completing KYC, but even then your privacy is poor at best. Laws like the one being discussed here will put an end to all that, though. It's full privacy invasion or nothing now.

The best time to stop using centralized exchanges was 10 years ago. The second best time is now.

I can only speak for myself, but I have never once wanted more regulations, more laws, more authority involvement, etc., for bitcoin. I despite the mentality of "regulations are good because it means we are being accepted" and other such nonsense. As DooMAD eloquently put it, getting away from centralized control is kind of the whole point of what we are doing here.

Unfortunately the global trends are leaning towards less financial freedom, it'll probably be the same in most of the world sooner or later. The EU being a huge market having an influence on other markets doesn't help here either.


Today those that aren't using exchanges or other places requiring the surrendering of privacy are a small shrinking minority, meaning there's less incentive for businesses to cater to them. With increasingly onerous regulations it'll be harder and harder to buy non-DNM related goods and services without self-doxing. At that point for most uses BTC will be no different than electronic fiat money, yes it can't be debased (although global macroeconomics in practice affects its price, too), and it can't be as easily frozen/confiscated, but if you know the HODLer's identity, you can often put pressure on them (from the authorities' point of view), but there will be less freedom to buy/sell/spend compared with cash or commodities such as gold or silver.

https://www.metzdowd.com/pipermail/cryptography/2008-November/014823.html

emphasis mine

Even Satoshi didn't have too high a level of expectations, in that regard Bitcoin has been a massive success. The unknown person who replied to Satoshi with "You will not find a solution to political problems in cryptography." was partly right, I think. Unfortunately, we the wide Bitcoin community have failed to adequately react in time, especially those of us who have been around for longer. (Whether it would have made enough difference is another matter...)

At that point, bitcoin becomes worse than cash. Bitcoin is great exactly because it is censorship resistant, it can be as private as you want it to be, and it cannot be controlled by third parties. If you are prevented from spending your coins without doxxing yourself to a third party, then bitcoin has failed to be private, be censorship resistant, or to be free from third party control. There have also been attempts (thankfully, all failed) to censor transactions at the mining level by (so far a tiny minority of) miners collaborating with blockchain analysis entities and refusing to mine certain transactions. As I've said before, if I can't spend my bitcoin without completing KYC or without some third party giving me "approval", then for me, bitcoin will have failed. At that point, it is worse than cash, which although based on the terrible fiat system can at least still be spent privately and without third party control.

I don't think it is too late by any means. There is constant progress being made in terms of peer to peer trading, decentralized exchanges, mixers, privacy wallets and techniques, and so forth. Even without any of these things, if people just stopped throwing their personal information out like confetti then much of this damage could be stopped or even reversed. The problem is all the newbies coming to this space are told by people who have never traded P2P to go sign up with Coinbase or Binance because P2P trading is too "complicated" or they are "more likely to be scammed".

https://twitter.com/wasabiwallet/status/1503091503207432193

Cryptocurrency payment processors are also sometimes asking for KYC, if they aren't, they can be eventually compelled to do so. Even P2P trading and decentralized exchanges can be attacked, e.g. Etherdelta's founder was probably the first case of a dex founder getting fined and the appetite has grown since then.

https://www.wsj.com/articles/cryptos-defi-projects-arent-immune-to-regulation-secs-gensler-says-11629365401


One way or another, I expect for all effort to be pursued to curtail as much of this type of financial activity as possible.


Coinbase, Binance and similar sites are so popular and will remain so because they allow users to buy/sell with less friction than the alternatives.

Yes, I'm aware that unfortunately Wasabi have sold out. I've told them exactly what I think about their behavior already: https://bitcointalk.org/index.php?topic=5391971.msg59741761#msg59741761

Absolutely. Don't even get me started on the clusterfuck that is BitPay. DaveF will tell you how long I can rant about them. :P This is why the best solution is for merchants to use their own self hosted processor such as BTCPay.

Depends on how you define "friction". I would say requiring me to give them my name, address, phone number, employment status, information on where my money is coming from and where it is going, copies of my passport and driver's license, selfies, and copies of my latest colonoscopy, to then have to give up custody of my money and still risk being locked out my account and waiting months for support to get back to me to be far more friction than simply finding a well rated user and trading with them directly peer to peer.

A lot, he can rant a lot. :-)

Bit of a ramble, but I also think it comes back a bit to philosophy.
I tend to use the "fight the fights you can win" theory when it comes to crypto and IMO  @o_e_l_e_o tends towards the "fight the fights that need fighting"

I don't like BitPay or any of the other intrusive services. But if I can talk a merchant into taking BTC and they don't want to do it themselves there is a limit to what is out there that does not totally rake you over the coals in terms of rates.

So in the end if it's BitPay / Coinbase Commecre / CashApp-Square / or nothing I'll choose to send them to one of those evil KYC places because *I* see it as a win that another merchant takes BTC.

Others that fight the fights that need fighting will see it as a loss since privacy just got slammed.
We need both types of people IMO.

2 side comments about BitPay.
1) They are now starting to take lightning payments
2) Unless you are doing that 1 large purchase that puts you over their somewhat arbitrary limit, they track by email for total spent. Disposable emails do help that issue a bit.

-Dave

It's really unfortunate that people are slowly being forced into centralization despite bitcoin being decentralized in nature. It's true that the government seeks control in almost every way possible, hence, the central organizations and other financial or exchanger platform under the jurisdiction of the government is mandated to have KYC on their clients. This is their way to regulate if they can't manipulate crypto itself.

Here in our country, you really have to use a centralized exchanger in order to spend or withdraw your bitcoin and other coins. This comes with tax in order for them to profit, of course, and anonymity is already compromised. But this is the sad reality. Sooner or later, verification of identity would be required and not just optional which will defeat the purpose of bitcoin. There may be ways, but hopefully in the future it won't be limited.

Another somewhat random thought is that yes it all comes down to tax revenue in the end as @AicecreaME said. At least here in the US and wherever they are.

As of now PayPal and Venmo the like in the US for the 2022 tax year now have to issue tax documents when you take in more then $600. It used to be $20,000 and 200 transactions.

There have been people screaming all over they will now have to pay income tax and collect sales on their sales.

Uhhhh, that's the law. Just because you have been running your organic honey and craft beer side business out of your garage and an occasionally a farmers market that does not mean you were not supposed to be paying income and collecting sales tax on your sales.

Sorry but as someone who reports everything and probably more then I should it's not my job to support you because you didn't want to report stuff to the government. Be it for privacy or you just didn't want to pay. Part of what the governments are doing and dragging the payment processors along with them is making sure they get their cut. We can argue about taxes all we want, but for the here and now it's the law of the land.

-Dave

certain people in this topic are trying desparetly to set up a narrative that people should avoid using services like bitpay and should instead pay a retailer direct. while also setting up that moving large amounts is a bad thing and people should use small amounts. and also people should use decentralised networks and decentralised mixers.. in short they are trying to find as many excuses for people to be prompted to lock up bitcoin and go play around with other networks of less security but the FAKE promises of privacy

what they do not realise is that their altnet they favour most is actually going to get even more regulated per user, than bitcoin is individually at its bitcoin core level.

yep they have made very many fake suggestions that bitcoin core is affected by new regulations while downplaying/ignoring/avoiding how their altnet nodes are going to get regulated.

here is what they should know
altnets that promote 'dex' might appear to be private and pretend to offer decentralised exchanging for fiat. or even unrecorded methods to 'route' a payment.. but, here is their problem

routing is a service for a fee.. yep if your allowing yourself to do 'routing' via associating a certain amount of balance of your altnet value to be used to 'autopilot' routes where you announce your channel as a possible route and a fee.. you are becoming a service provider.
however bitcoin core does not annouce itself as a service for a fee so bitcoin core is not under the new laws of "service provider"

also even if you can hide you identity when doing decentralised fiat exchanges on altnets.. your bank can clearly see you doing lots of random wire transfers to lots of random people. and under terms of most personal bank accounts , this is a big no-no, because its seen as you either doing money laundering for doing all these swaps of fiat between people, or seen as running a unregistered money service business.

yep it does not matter if your trading casino tokens, pokemon cards, or crypto, if your taking in many wire transfers from one bunch of people and sending out wire transfers to another bunch of people . your bank, without even knowing or caring about the platform/network/token you might be playing with. will just see the fiat movements and slap you with demands

yep using an altnet wont hide your wire transfers. so pretend that using an altnet to hide the crypto stuff also hides the fiat stuff.. it does not.

many people have tried to say 'localbitcoin' failed because 'bitcoin is centralised' when the reality is that the sellers on localbitcoins were independent and decentralised in regards to the bitcoin side..  but their bank accounts were flagged as running a possible illicit/unregistered business/service simply because of the amount of wire transfers being processed. its not localbitcoins fault. its the banking fault of personal account terms and conditions.

so if you want to use an altnet to do fiat swaps/routing for anything. you will have to register as a money service provider and have a business account and become regulated and file taxes on your income and outgoings.
yep the very feature of a certain network only works by publicly announcing your channel as a route.. for people to the route .. thus you cannot hide
(well you could in its early iterations, and could if you tweak your node to plan routes outside the new bolt method, but certain devs of that altnet prefer the public listing bolt version now, so goodluck with that fake 'privacy' statement now)

oh and having the altnet offering payment services via things like 'shopify' will make people need to give info because shopify is a service provider like bitpay. meaning the altnet is actually not trying to find ways to avoid bitcoins bitpay problem, instead they are just making false statement that their altnet is better than bitcoins network. .. (facepalm)

I see very interesting opinions in the thread, and rather than commenting on some of the aspects that you have mentioned, I wanted to share my personal experience with something that I see a parallel with and that has been going through my head a lot lately.

If I remember correctly I started playing poker online in 2009. At that time poker houses, and I understand that online gambling houses in general, either had a license to operate from a tax haven or operated without a license. No one sees a parallel with crypto gambling houses today?

If someone asked about taxation of poker profits in a poker forum, everyone said that there was a legal obligation to declare, and that they declared everything they earned, even though it was practically impossible for the states to know anything about their earnings unless the deposits and withdrawals were made by international transfer, which would take a long time and would probably be blocked by the bank because they were transfers to and from tax havens.

We were in the midst of the crisis that began in 2007/08 and until then the states had not paid much attention to online gambling, because before the bubble burst, the economy was doing very well (or rather we can say, it was super-inflated).

When the bubble burst, states started looking for money everywhere and one of the things that were targeted were online gambling houses.

Long story short, the result was quite disastrous. In part I understand that it is logical that the states ended up regulating the game and charging taxes for it, the problem is that in some cases they did it in the worst possible way, compartmentalizing a market that was once global.

We could say is good that today the states charge taxes for online gambling, which is logical, the bad part was killing the goose that lays the golden eggs: there are fewer and fewer players, houses give less and less rakeback, the tables are getting harder and harder. This has been an inexorable trend with the exception of 2020 when lockdowns made a lot of people decide playing online poker while having a few beers.

I suppose that it is partly because I have lived through this experience that I am pessimistic regading the possible EU crypto payments regulation, although something similar does not have to be repeated, but it makes me think that in the end legislation will be implemented that will allow the states to continue collecting taxes and will greatly attack privacy, and it is not that the states of the EU are characterized precisely by having a great libertarian movement that can oppose this type of regulations.

another reason that crypto is becoming regulated by the financial agencies of government. is because instead of being treated as a product(like facebook credits) its being treated like a currency. thus regulated by currency agencies.

if bitcoin did not get classed as a currency. trading it would be classed as buying a product. but because its treated as a currency. trading it is an investment/money service business.

exchanges in 2010-2014 got away with not being regulated simply because crypto was not legally classed as a currency. so currency rules didnt apply. exchanges worked as retailers offering a product sale/refund to-from fiat
but now countries recognise crypto as a currency and so currency rules apply when swapping for fiat

I think that when it comes to money and somehow they want to tell you through regulations and No privacy so that you have less money, people simply become irreverent, because normally both the rulers and the banks have their money and it is a lot that they have, then they are not interested in people in their particular economies having money or being able to achieve financial freedom in an economy totally different from the traditional one, this is what we commonly call the advantage of the deflationary economy over the inflationary one, where the traditional and inflationary economy, the accounts know who it is, and they have all their data, while with Crypto if the person wants to maintain their anonymity, they will keep it that way so that no one messes with them, this is logical.

i know that people are concerned about privacy .. by this i mean the privacy people had pre 1960's (before debit/credit cards were invented) where cash was treated as private.

i know people are concerned that in a "cashless" society of electronic currency that everything can be tracked. well this is true. everything is tracked and logged somewhere.

but lets not go tin foil hat with silly propaganda that there are millions of government employees watching all these movements.
yes your trades and deposits/withdrawals are logged by service providers. and yes out of all of these logged items 1% of them get forwarded on to government systems. and out of those 1%.. 0.99% (99% of the 1%) are just logged on government systems but not seen by human eyes of government employee's.

im not saying dont care about privacy. im saying dont exaggerate what actually happens to your data by thinking that doing $1k will get you punished/visited at home by swat teams.

i personally have moved alot of money way beyond $1k values, and i do not get knocks at the door from government agents.

i am not worried about the fake news propaganda that bitcoin-core will need to KYC all its users, because i actually read the US/EU law proposals and none of them actually even hint at that requirement

if we are to have a rational debate about privacy and its implications, we must start with the reality of the situation.
for instance if its not about wanting to remain private because your a criminal, but instead you dont want to have to pay taxes on your funds. there are actual tax avoidance methods(emphasis legally allowed avoidance not criminal evasion)
just look at the UK/US government politicians.(google them) they are happily giving themselves 'loans' to receive income without paying tax.
we can develop ways to instead of 'exchanging' crypto for fiat(legally defined as investment/income), we can set up 'loan services' where its listed in terms and conditions that we(as a service users username) are 'loaning' to our individual self, fiat/crypto at 0% interest with lots of non-conditions of repayment. EG 99 year repayment schedule with a $0.001 penalty for non re-payment in 99 years, which can be written off if loan recipient is deceased

if it is about not wanting to be seen because you are worried you could be seen as a criminal due to your activities. well we can try to have a rational debate about what services to avoid to ensure you are not spotted. EG many people dont realise that using mixers will actually get you spotted more by a service than you would if you just done a normal deposit into a service without the mixer... using known tor exit nodes, known VPN/proxy services will raise red flags too

so how about get more clever, such as setting up services where we loan our online pseudonym fiat to deposit into services which by terms of the service become tax exempt legally thus no need to report. and the same where online pseudonym 'loans' your human self on withdrawal.

basically re-define an exchange as something legally outside the remit of tax reporting, so that exchanges have less bureacracy.

also highlighting if you dont currently want fiat right now, simply dont use fiat based services

True, especially in the past several years there's often even more friction compared with the legacy highly-regulated financial system. But these type of sites tend to be at the top when googling 'buy bitcoin' in English and in other languages. And they often started as less restrictive; many users will (sometimes happily, sometimes grudgingly) provide whatever is asked of them to continue using a given service. The requirements are also lower for people who try to buy/sell small amounts, so there's sunk cost to be taken into account, especially with services happy to accept money before freezing them and requiring verification.

This is a very interesting analogy, but perhaps it gives some hope rather than just a bleak picture of the future. Once poker started getting clamped down on, then your options (correct me if I'm wrong) seemed to be either suck it up and accept the overly aggressive authorities, or stop playing, with many players choosing the latter. The same is not true of bitcoin. With centralized exchanges and other centralized services are being clamped down on, the alternative option remains to trade peer to peer, hold your own coins, spend bitcoin directly with merchants, and avoid centralized exchanges. In fact, the more people who do this, then the more bitcoin functions more like what it was designed to be - a peer to peer currency free from third party control.

Yes, I abhor the crazy privacy invasion and mass surveillance that is steadily progressing through this space, but the more authoritarian they become then (hopefully) the more people start using bitcoin as bitcoin was intended to be used.

Absolutely agree, and services know this too. Let people sign up with a non-KYC account or minimal-KYC account and access some basic functions. Then, once they have started to use your service, confiscate their coins and hit them with more KYC demands. Options are then to give up your information or give up your coins. Most will choose the former. It's a particularly scummy and borderline criminal behavior that all the big exchanges do regularly, and it never fails to surprise me that people will continue to use services which pull this crap on them.

Localbitcoins was a perfectly fine site that worked for in-person cash trades until the regulatory climate forced LBC to kill off that feature (they could have moved to a different jurisdiction but that wouldn't be enough in the long term).

But surely that functionality doesn't have to take the form of a centralised website?  That's a big, easy target for regulators.  Alternatively, it could work as an open-source, downloadable software client which matches up prospective buyers and sellers.  That way people can distribute the software via torrent or other hard-to-shut-down filesharing methods.  Why aren't we just doing that?

That's exactly what Bisq (https://bisq.network/) is doing. The software runs directly on your computer, syncs to the Bitcoin network and connects with other peers over Tor. It then broadcasts your sell or buy offer to them and aggregates everything in a pretty nice GUI. Multiple fiat payment methods are supported, as well as in-person cash.
But the trading volume is relatively low with a few hundred FIAT<>BTC transfers per week. https://bisq.markets/

I would like to mention that I'd prefer recommending 'Bisq and X and Y' because always recommending the same service makes you sound like a shill, I realize that. However, sadly I am not sure there is a lot of competition in this 'P2P anonymous exchange' market. I'm happy to be told otherwise and to get more recommendations, though!

Ones that I personally have used and recommend (in order of preference) are Bisq (https://bisq.network/), LocalCryptos (https://localcryptos.com/), and HodlHodl (https://hodlhodl.com/).

Another I am aware of which generally has a good reputation but I have never used personally and so would not recommend based on that alone is AgoraDesk (https://agoradesk.com/).

I've also recently become aware of RoboSats (http://robosats6tkf3eva7x2voqso3a5wcorsnw34jveyxfqi2fu7oyheasid.onion/) (only available via Tor) which is a very new exchange looking to facilitate fiat/Lightning trades. One to keep an eye on, but again, I am not vouching for it by any means.

Localbitcoins has a long-standing reputation and has proven itself, this is indisputable. But times are changing and no one is able to resist the pressure of governments. I don't know if you have seen this news: Localbitcoins submitted data of over 100,000 Russian users to the tax authorities (https://news.storyua.com/news/amp/9073). I'll give you the first link I can find on this thread.

After such actions, will you still have a desire to use this "perfectly fine site"? What if your name ends up in such a database?

Thanks, I will have a look at / try them!

This seems like a design flaw to me, though. If you implement it 'right' (such as in Bisq), there are no servers that could store user data and the only time your payment information leaves your device is when someone accepts your offer - because somehow they need to know where to send the fiat / btc. That way, no matter how much pressure someone puts on Bisq devs or how hard someone tries to hack their servers, they won't find customer data, because it is decentralized and stays on people's own machines.

When I'll check out those other recommendations by o_e_l_e_o I will focus on this aspect a lot, since it's kind of a game-changer for me. I might actually make a review / comparison thread if it doesn't exist yet. Would need to collect more information / experience first, though.

here is some lessons to learn about privacy..
ill use fiat as the established example.

when you buy things from walmart with your debit card. your bank only sees you->walmart $xxx.xx
this does not raise any red flags, because walmart is a legit business. your bank has no need to ask for what you have bought.
yes walmart keeps receipt records of your purchases(not your bank. nor government) BUT it is possible for there to be some future need to have your bank ask about a certain purchase and make a court order for your bank to ask walmart to disclose the details of your receipt.. but this is not a default thing. its the exception..

however if your bank offers you 'cashback' on purchases.. watch out. this is your bank bypassing the government overwatch exception, and instead is where your bank as a business wants YOUR PERMISSION to gather your purchase items lists from walmart so that your bank(as a business) can sell that data to other companies who may want to advertise their similar products to you

this is not about government surveillance. this is about the bank as a business getting your consent to invade your privacy for their financial gain with an enticement that you can make money too from their invasion of privacy

what you will find is that many CEX and even DEX will try to sell your data to other businesses. and yes. many of the new laws that allow businesses to share data, are not done by government wanting oversight at their level. but from businesses lobbying government to make these rules to allow businesses to make profit.

a bank/business does not need to wait for a court order from a government to be able to pass data, IF the terms and conditions of the bank/business makes the customer persuaded into signing upto/opting-into something that gives that bank/business permission to pass data

its why even here in the UK your medical records are still deemed private. unless you as the patient have opted into a service that allows data to be shared.

i say all this because even if there is no current law that has the government keeping records on everyone. (yep i said that the government does not store all database records of all coinbase customers, FACT) due to laws around needing court orders and suspected reported behaviour to trigger a court order request..

however coinbase or any exchange can simply put in the small print of their T&C of membership accounts that the member of coinbase by signing upto the service has by default opted into a scheme allowing their data and even their deposit taint analysis to be passed onto third parties
. they currently are not asking for consent to sell your data.. but they can.. EASILY

but they do ask for your implied consent to bypass the court order requirement.
here is one example of coinbase bypassing the court order requirement by getting your consent that allows them to pass info around without the need of a court order (getting your consent/authorisation)
https://www.coinbase.com/legal/user_agreement/united_states

As malevolent stated though, this never used to be the case. I used LocalBitcoins many years ago when they were still a peer to peer exchange with no KYC requirements and no invasion of your privacy. However, now they are little better than most other centralized exchanges and if you use them you have little to no privacy. As soon as a service starts asking for KYC, time to abandon that service.

While I often use sites like LocalCryptos and HodlHodl, they are not immune from this either, and with the right amount of pressure on the right people they could also be forced to either shut down or to start demanding KYC. If that ever happens, then again, I will abandon them. The upside here is that since they are peer to peer exchanges they don't hold custody of any of my coins, so can't seize them and lock me out of my account like centralized exchanges do when they start ramping up their KYC requirements.

As n0nce says, this is what makes Bisq stand out. It is open source software you run yourself and connect directly to other trades over Tor. No amount of KYC requirements can stop me from running the software. Asking Bisq to collect KYC details would be the same as asking "Bitcoin" to collect KYC details - there simply isn't a centralized entity to do so, nor a realistic way to do it.

Privacy Ah.. Nothing private these days, A kid is born its photo goes online. We live in information age and in future identity theft will be most serious and challenging crimes. We don’t know even today someone might be using a mobile phone with our identity documents to issue it. So it become more important to protect our identity by hook or crook.. The governments will try to decrypt the crypto, but there will be geniuses who will find a way to keep working silently and anonymously..

In my country, you don't really have to use a centralized exchange in order to spend or withdraw bitcoin and other coins. Everything happens in the dark-market , so if someone is not able to use P2P platforms, he can always deal with local buyers and sellers who are running closed groups (mainly in discord and facebook) and can even use escrow services from group admins.

Looking at the topic, I see that somehow when transactions are made with BTC, they require KYC in some establishments, be it in a store, or even more so in a bank, but honestly, the mixers are somehow the solution, in the country where I live, everything, they absolutely look for the way that should be done to do what we want, at one point transactions were made with the so-called traveling dollars that were looking for points in another country as if they were in other countries, now one thing that is even easier as the fact of acquiring privacy, I do not see it as something so complicated, if we allow our data to be given to government organizations and declare that we have BTC, I think we are totally lost, but if not, there are many ways to evade, the most reckless is in the dark web, it is a dangerous way but it exists.

Privacy and anonymity for me is becoming more and more difficult, so much so that I would dare to say that in less than 10 years it will be very difficult to possess it.

It really is not. You should not take regulations lightly. The government can and absolutely will ban Bitcoin given the opportunity, using regulations as a cudgel to force compliance. They don't need your private keys nor do they want them. As long as they can convince everybody else that isn't yet a Bitcoin user that they should not adopt, their goals have been accomplished.



This is insanity, and coincidentally the U.S. also invoked terrorism or national security as a reason for regulation of crypto currency. It's becoming a pattern of lies and deception. Almost like there's collusion.

They won't be able to ban bitcoins and worldwide users like I know they will try to manage bitcoins/ want to embrace bitcoins and drag bitcoins with them because they crave and want bitcoins but obviously  Obviously, they won't be able to do that.  The evolution of always open, decentralized technology will welcome the world in the next few years.

When geopolitics has alliances, why can't bitcoin have coalitions from countries that are considering bitcoin's legitimacy in the future?  Whether the government of each country is urgent with regulations or not, it has been proven through the history of the development of bitcoin.

This was to be expected since governments often see crypto as a threat to the existence of Fiat. The EU decided to "up" their game as they believe crypto can be used by Russians to avoid sanctions. Other countries are tightening regulations for the same reason. Privacy in crypto/Blockchain land was relatively non-existent since centralized exchanges and transparent cryptocurrencies like Bitcoin and Ethereum have dominated the industry for long. There are only a few privacy-oriented solutions, but adoption is relatively low.

What matters is that crypto stays decentralized so that it can stand the test of time. As long as there are defenders of privacy and decentralization, there should be nothing to worry about. Just my thoughts ;D

After this horrible thing happened it is great for at least the UK is out of the Eurozone and there are a couple of exchanges there which can offer to withdraw money to your bank account or a crypto wallet that you own,Cex being one of them and I did a transaction as a test compared to other exchanges in the EU,it passed without problems to my bank account the money and also to my crypto wallet.I think we need more countries like this who do not give a damn about what Europe does.

right, they simplify the rules regarding the use of cryptocurrencies, so that it will be easier to develop and develop their society regarding technological developments that are currently happening as well as opportunities to improve the personal economy which has an impact on improving the country's economy, even though what the UK is doing is an extreme measure, but this will be better for their people

I am not entirely sure, Europe is just way too big to ignore, I get that people could continue to do whatever they want if they are not in Europe, but I doubt governments could get a better economical situation if they just simply get Europe against them.

You have two options, either make the crypto people in your nation happy while facing Europe, or you could act natural to Europe and try to get help from them financially while facing your crypto people. I think most nations will pick Europe over their own crypto people. Doesn't mean that it is the right choice, but it is the known choice and they will go with the devil you know type of deal instead.

Being in a union cuts both ways. When you are out of it, you can't benefit from the advantages like tax agreements and that returns you higher import prices. However you can create competition by making more investor friendly laws and that will attract more investors like how UK done here.

It seems to me decentralization is a good thing even on a country level.

The more independent countries we have, the more competition we have. The more competition we have, the more investor-friendly laws we get and that means the world government will never work out. Globalism is a fad.

Cryptocurrency provides the features of anonymity which might be seen as a threat to many governments. We can not deny that the feature of anonymity will always serve good.

Yes. Competition is needed in order to help prevent "globalism" from destroying crypto in its entirety. Some governments may become oppressive against crypto/Blockchain tech, but others will embrace it with open arms. I guess the EU doesn't want to be at the forefront of crypto innovation. Privacy is a human right, which is something crypto originally stands for. Without that, how would people experience true financial freedom?

We're going to have to see how this will end in the long run, as the crypto/Blockchain industry grows at a fast pace. The more popular it becomes, the more governments will be forced to adopt the "revolution". As long as decentralization wins, we should have nothing to worry about. Just my thoughts ;D

Thats exactly it, I said before that governments can only affect the usage of Bitcoin
through the entry and exit points - exchanges


If everyone who is serious about Bitcoin embraces more the idea if decentralisation and seeks
out privacy orientated solutions we can bypass these crazy laws.

As regards these new laws they have to have a negative effect on crypto development in
the EU, I wonder will future bureaucrats vote to abolish these backwards looking laws when
they realise that all the reasons why they are implimenting these laws still exist in the future.

Agree. But not everyone is knowledgeable about crypto/Blockchain tech, so most people will give away their privacy as long as they get convenience in return. While it's technically possible to "bypass the crazy laws", I wouldn't recommend doing so since that would mean facing jail time or fines by the government. Of course, privacy is a human right. But you would have to decide whenever you want to sacrifice your freedom to obtain privacy/anonymity or all the other way around. There's always a way of getting caught even if you use the most decentralized and anonymous methods ever devised.

Sadly, governments will continue to implement stricter regulations against crypto/Blockchain tech in order to stay in power. Fiat will always prevail because it has the backing of governments and central banks. We'll see how EU's moves against crypto will turn out to be in the long run. Innovation/growth will surely diminish within EU-based countries, forcing investors to go elsewhere with their money. As long as crypto stays decentralized, nothing else matters. Just my thoughts ;D

Undoubtedly governments will continue to try to regulate crypto. Will they be able to fully succeed, that is the question. In principle, people don't need their permission or approval to use crypto, and nothing prevents them from using it explicitly.

And here I disagree with you. Fiat forms of money are already being rapidly superseded by the digital version as more and more people pay with plastic cards and mobile apps. The proportion of people still paying with cash has been decreasing every year and will continue to decrease. And since fiat is practically impossible to control (just try to track the movement between people) and is 100% anonymous (there is no binding of banknotes to a specific person), then with the departure of fiat, society's finances will turn out to be more controllable and traceable.

Actually, it's quite predictable. Nothing good is expected, because it is not profitable for governments if people use crypto on a massive scale. Therefore, they will prohibit, limit and demand taxes from this.

Succeed in what? Regulating it? They've overstated with KYC in centralized exchanges, wherein most of the users buy and sell from. They already have enough information to control them. Part of the United States' national spending goes straight to Chainalysis.

Whether you pay in cash, via bank account or via PayPal, it's the same currency. In fact, using fiat digitally is traceable. Much better for a government.

I think m2017 is a little bit confused about the definition of Fiat here. With 'Fiat forms of money', he means paper and coins. Cash is actually pretty much anonymous, indeed.

This is an interesting topic that you brought up; we've got a bunch of historic examples of prohibition and they didn't all really work out to be honest. So I agree that governments don't like to lose control over the money, but I'm not sure whether they dare to try the prohibitionist route, it can be quite risky.



Honestly, I believe prohibition of Bitcoin could actually have the chance to become the biggest driver of innovation in privacy tools and developments in and on top of BTC.

Yep.  I think that's the reason most places haven't come down super-hard on Bitcoin.  If they drive usage underground, it becomes more resilient by nature.  So instead they chip away gently with KYC at the on/off ramps.

circa 2009-2014 bitcoin remained outside the realms of government jurisdiction.
it was by nature classified as a product/good(asset) where traders were dealt with as private citizens and merchants.

then when it became declared 'currency'(asset) it then became within the realm of jurisdiction of government regulation. because CURRENCY fell into the regulations of SEC/FINRA/FINCEN/FCA

where by traders were deemed not as private citizens/merchants, but as MSB(money service businesses)
..

the next rabbit out of the hat. is accepting taxes/court fines/lobbying/political campaigns and other government payments in crypto. which is the 'legal tender' side of things.
the negative affect is that this also comes with more regulations directly impacting the usage of crypto falling into the jurisdiction of governments.
EG needing to KYC payments and tracing of taint to make sure that laundering and criminal activity is not linked to funds received by legit payment services.

..
in short when people got excited that countries were recognising crypto as a currency and then deeming it as legal tender.. those 2 events have and will come with negative consequences.

bitcoin would have been better off without the 'currency' and 'legal tender' recognition by governments.
we (as crypto users) would still use it the same in trade and exchange. but the laws of 'currency' and 'legal tender' would not apply

EG
a car is not currency.. its a store of value that can be traded.. and by not being 'currency' even though people trade cars every day.. and think of cars as an investment. fincen and SEC dont get involved in car trades

My concern is that the major players (US, EU, China) will either collude with one another to oust Bitcoin or act independently to regulate all cryptocurrencies to such a degree that investors flock to other assets. At that point, it'll be impossible for the rest of the world to compete and out maneuver the larger economies because of how much capital they control. There aren't enough day-to-day users of Bitcoin that would allow the price to be maintained (at it's ATH or lower) if the institutional investors are gone.

I wouldn't mind seeing a pro-BTC coalition. Problem is that most countries are on the wrong side of the issue.

depends what you mean..

africa has more population than the EU,UK and US combined.
yep eu=450m, US 330m, uk 70m=850m
africa=1.2bill


so if africa was to become pro bitcoin. then they can outpace the userbase of the US/EU market that currently dominates bitcoin.

south america has more population than the US OR EU

asia has more population than the rest of the world.. so excluding china. still leaves 3billion people that outpace majority of any 'developed' nations combined..

the only issue is not regulation worry of developed countries.. but the very fact that the over half the world population that could have used bitcoin the most(poor/unbanked).but cant use it due to not government politics but developer politics of not wanting bitcoin to be 'digital cash for the unbanked'

its the dev politics that want bitcoin to be a government recognised 'world reserve' where its recognised enough to 'go legit' and be regulated. which then also has consequences as described in my previous post..

many people in this topic have mentioned or atleast thought 'where is the lobbying to fight against regulation..'  well the main exchanges are not fighting against regulation. the main exchanges are already regulated because they handle fiat. and so regulating crypto is not a hurdle for them. infact they now see it as a benefit. as it stops new players becoming competitors by having a barrier of entry.
yep most exchanges want regulation because it 'legitimises' their operation and makes them have a corporate level of 'trust' in their custodianship while preventing new competitors from just swooping in and stealing their customers.
so if your wondering where the exchanges have been.. they have been lobbying to governments. but lobbying for regulation. not against it

I mean strictly from economic power, so taking the GDP of the top countries instead of on a per capita basis. Even if the population of Africa might be greater than other regions, if African spending power isn't enough, then they can't use Bitcoin at the volume they'd need in order to compete with the larger economies. Meaning, if the US/EU/UK/China banned Bitcoin, I don't think Africa or some other Asian countries could carry Bitcoin alone.

I agree that most exchanges don't need to lobby against regulations. They're already so regulated that there's no point in lobbying against it. Damage is done.

This makes no sense; Bitcoin doesn't care about what volume is transacted. In fact, a transaction spending 1BTC or one spending 0.01BTC are almost identical on the blockchain. And running nodes is very inexpensive and easy to do, as well - one of the greatest advantages of Bitcoin over other cryptocurrencies which need expensive hardware and networking. This is essential to run Bitcoin infrastructure in developing countries, like franky mentioned earlier.

Here is my thread about building a node from spare and used parts under $50: https://bitcointalk.org/index.php?topic=5364742.0

So I don't understand what you mean with 'Africa or some other Asian countries could [not] carry Bitcoin alone'.

I see this as a good thing. Not only will this put centralisation into the meat grinder but it will also force us to find better ways to decentralise. The government has been trying as hard as they can to put Bitcoin and other crypto into a corner and has never succeeded. Centralised exchanges are and always have been a bad idea which goes against what crypto, especially Bitcoin, stands for.

Now is the time for more innovation in the area of decentralisation and DeFi especially.

Our governments have absolutely no control over our coins unless we give them control. Do not let them spook you into giving up control.

Never give up, never surrender.

It's just a matter of time until every countries in the world have their own strict regulations against crypto. Actually, it was already expected to happen in 2022 since years ago, including in my country, which isn't in Europe. I'm also fearful about the decisions being taken by authorities, because it's certain common users will suffer the most, be it through abusive taxes, excessive bureaucracy or total invasion of privacy.

The only example of country we have which apparently stood against bureaucrats interests was El Salvador and they are in a very delicate situation with IMF. The bureaucrats used El Salvador example to teach a lesson to another countries not follow the same steps of the small central american country. Unfortunatelly they may have success, because what countries would be crazy to exchange the support and loans from IMF for adopting a friendly stance towards a volatile digital currency which can bring losses on short-medium term for investors?

I don't think governments will succeed because of the decentralized and censorship-resistant nature of crypto/Blockchain tech. Regulations can only be enforced on centralized exchanges and centralized wallet providers. Anything that's not centralized would be out of a single government's jurisdiction. As Bitcoin and other cryptocurrencies become more popular, governments will implement stricter regulations in order to minimize its growth worldwide. What ultimately matters is decentralization. As long as Bitcoin is able to stay that way, it will last a lifetime. ;)



Digital Fiat will mark the end of an era for privacy. After all, governments will have more control over people's finances. Fortunately, Bitcoin and other cryptocurrencies will be there to save the day. With decentralization at the forefront of crypto, I don't think privacy will fade away into oblivion anytime soon. Just my thoughts ;D

government cannot control bitcoin (the technology) just like they cant tell a bottle of wine to stop being swallowed.

however governments can regulate PEOPLE. and laws apply to people. because people can be punished and people can read the law.
(bitcoin(and wine) has no brain or eyes. it cant read paper laws. it cant be punished. but people can)

governments can regulate businesses(run by people). and create laws obided by people.
people can try to evade the law. but at risk of punishment if found. and governments can find ways to find people (like how silk road creator was found even with things like tor, proxies)..

yes the laws on alcohol (1920's prohibition.. and under age drinking) has not been effective. and people still drunk it. ... though many people were also caught and punished

yes the laws on drugs ('war on drugs') has not been effective. and people still got high ... though many people were also caught and punished.

..
so although drugs are still available, and alcohol is still available even to underage people and even when it was prohibited in the last century... and bitcoin will still be available .. people using them are limited in their freedom and openness about their utility of it

..
many businesses are not lobbying against it. because these limitations become opportunities. if they can afford the fines or afford the licencing to become legitimate merchants of the limited use items. they can monopolise the market and not have much competition.

regulations are the opposite of the 'free market'.. but hey.. thats capitalism

(im against monopoly and capitalism, and where regulations are used to stifle growth/openness.. but i atleast understand it.)

All they need to do is make it illegal for any business or bank to dea lwith Crypto currencies other than governments own digital currency. Game over.
I'm only surprised the yhaven't done it yet. They are slowly moving to strip us all of every privacy.

Too much regulations will do more harm than good for the growth of Bitcoin and other cryptocurrencies on the market. Governments want to abolish privacy because they want to prevent people from gaining true freedom and financial independence. It's a good thing most cryptocurrencies are decentralized, or they would've been easier targets by mainstream governments. Most people don't care about their privacy these days, so they will use CBDCs even if such currencies will be under the full scope of governments and central banks alike. After all, most people don't have nothing to hide.

Fortunately, privacy won't go anywhere soon thanks to anonymous cryptocurrencies like Monero and Zcash. While governments can impose regulations to restrict or even ban the use of privacy coins, they can't be enforced because of the decentralized and censorship-resistant nature of crypto/Blockchain tech. I hope crypto remains that way in order to minimize government's power over the people as much as possible. Just my thoughts ;D

Of course it is a future and one that is definitely realisable as it favours the government. The silent reality about it is, its not going to be effective only in the EU although, it might lay its foundation there in the EU but, would be slowly adopted by other regions, Unions and nations in our world, given the fact that its a government favoured orientation and almost all government looks towards crypto regulation. Although, the policy adaptation would be largely dependent on the success of the intent in the EU and there is a very little chance for it not to be effective on the exchanges being a profit organisation that would do what it takes for them go be functional in certain regions and in compliance with the government. This is generally bad for privacy concerned investors but in all, I think they can't end the will of crypto enthusiasts for cryptos and its operations.

I'd just like to point out that Zcash always relied on a set of private keys being created and exchanged securely in a so-called 'ceremony' made by a set of people (developers) when they started the project. I wouldn't trust a dime to a system like this.

Apparently, they planned to move away from this in May (last month), but the text is still in past tense, so I have no idea if this ever happened.

That was at the beginning. But the recent network upgrade has changed all of that (apparently) by removing the trusted setup. Some said Zcash was compromised from the start, as the company (Electric Coin Company) introduced a backdoor to help governments circumvent/bypass privacy features. I guess the only true privacy coin is Monero with its proven track record of development and innovation.

Governments don't like privacy, so they will do their best to bring the revolution down to the ground. It'll be up to us to help support privacy-preserving technologies to prevent governments from winning in the long run. As long as decentralization prevails, there should be nothing to worry about. Just my thoughts ;D