[2017-12-19] EU Agrees on Stricter Identification Rules for Crypto Exchanges

[DowBit]

European Union legislators agreed Friday on tougher rules for cryptocurrency exchanges. The new measures are part of efforts to combat money laundering and terrorism financing — as well as tax evasion. If the legislation passes, it will mark the end of anonymous transactions on exchanges and operations using pre-paid payment cards.

Crypto exchanges, wallets and companies that hold clients’ funds will be required to identify users. Right now each exchange has its own policy, but, as a general rule, account verification is required past a certain limit.

“Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing,” Europe’s Justice Commissioner Vera Jourova said.

The agreed-upon measures took more than a year to negotiate. The European Commission proposed the changes in the wake of bombing attacks in Paris and Brussels in 2015 and 2016, which killed more than 160 people. EU states will ratify the new rules into national laws within the next eighteen months. The reason the process has taken so long is that some EU states opposed increased transparency for companies, fearing a negative impact on their economies.

EU lawmakers in charge of the decision reported that Britain, Malta, Cyprus, Luxembourg, and Ireland were among states opposed to the changes. They fear that the deal would give authorities too much control over the data of private citizens. Police or tax authorities that can “demonstrate legitimate interest” to access user data will be granted this access to beneficial owners of accounts and trusts.

Transparency International already labeled the deal “a breakthrough.” The group believes that public scrutiny is essential to prevent financial crimes and tax evasion.

More: https://dowbit.com/eu-agrees-on-stricter-identification-rules-for-crypto-exchanges/

[European Central Bank]

if you've ever dealt with bitstamp i find it kinda hard to see how they could possibly make it stricter without inviting the ceo into your house and letting him observe you for a month. there are hardly any alt only places that let you show up anonymously too. nothing much new here.

[Xavofat]

there are hardly any alt only places that let you show up anonymously too

The major exchanges don't let you, but you can still trade about $5000 worth of crypto on Shapeshift at a time.  Since you're anonymous you can pretty much do it to an unlimited extent (you can just keep changing your IP).

If people really want anonymity, they go for the most anonymous place that they can get to, so Bitstamp is definitely a poor example.  They go out of their way to make sure that they're very comfortably compliant.

Because of that, the EU might find it tough to handle P2P exchanges which don't require verification and any other trades which are out of their control.

[European Central Bank]

there are hardly any alt only places that let you show up anonymously too

The major exchanges don't let you, but you can still trade about $5000 worth of crypto on Shapeshift at a time.  Since you're anonymous you can pretty much do it to an unlimited extent (you can just keep changing your IP).

If people really want anonymity, they go for the most anonymous place that they can get to, so Bitstamp is definitely a poor example.  They go out of their way to make sure that they're very comfortably compliant.

Because of that, the EU might find it tough to handle P2P exchanges which don't require verification and any other trades which are out of their control.

proper p2p is out of the window completely, but they can do something to places like localbitcoins or bitcoin.de. those are identifiable sites. same goes for shapeshift too i guess. it would suck if these places decide to do a usa and figure it was too much work to accommodate europeans but they'd be throwing away a mountain of fees.

[CryptoBry]

I am quite expecting of this move. There is a legitimate reason why the government will be imposing stricter requirements for exchanges and wallet to implement the KYC rules. This is actually one of the best ways we can also combat scamming in the cryptocurrency world as there are now many scam artists finding nests in cryptocurrency. With the help of strict KYC regulations, we can minimize if not totally killed scammers. Targeting many birds with just one stone, the government can also have a way to track people who are evading the paying of tax. We know that people will avoid tax like a plague if there is a way to get away from it.