[2021-07-21] Bitcoin and Ethereum take a hit after EU proposes anti-terror crypt

[Woodie]

Bitcoin and Ethereum take a hit after EU proposes anti-terror cryptocurrency regs

Yesterday, the EU Commission announced that it was putting forward proposals for stricter regulations on cryptocurrencies to combat money laundering and terrorist financing. The plans are set to affect how both transactions, and the anonymous storage of cryptocurrencies is dealt with. On the day of the announcement, popular cryptocurrencies, such as Bitcoin and Ethereum, took a brief pricing hit.

The proposal for the new legislation involves a bid to give governments across the EU greater ordinance over cryptocurrency, meaning transactions involving currencies such as Bitcoin, Ethereum, and Ripple will soon be fully traceable.

The announcement (via. Golem.de) notes, "These proposals are part of the Commission's efforts to protect EU citizens and the financial system from money laundering and terrorist financing. They aim to facilitate the detection of suspicious transactions and activities and to close the loopholes that criminals use to launder the proceeds of crime through the financial system or to finance terrorist activities."

The plans also point to cash limitations of €10,000 ($11,777), and the prohibition of anonymous cryptocurrency wallets.

"Limiting high cash payments makes it difficult for criminals to launder dirty money. In addition, the provision of anonymous crypto 'wallets' is prohibited, as is already the case today with anonymous bank accounts."

There's no word on what this means for anyone currently harbouring an anonymous cryptocurrency wallet but, once all is agreed upon, future wallet setups will involve giving up your personal data to the government.


Read more https://www.pcgamer.com/eu-bitcoin-ethereum-cryptocurrency-wallet-transaction-regulations-proposal/

[Lucius]

Nonsense, what does a 5% price drop have to do with something that is just proposals, and at best it could only take effect in 2024? I'm really interested in how exactly they intend to make all crypto transactions full traceability, unless they think that everyone who owns cryptocurrencies will voluntarily report it. If, on the other hand, they think of crypto exchanges, the vast majority of those who operate within the EU already have more than strict KYC rules, so if you buy crypto, it is not that you can launder money or finance terrorism with it.

The legislative package will now be discussed by the European Parliament and Council. The Commission looks forward to a speedy legislative process. The future AML Authority should be operational in 2024 and will start its work of direct supervision slightly later, once the Directive has been transposed and the new regulatory framework starts to apply.

[DooMAD]

In addition, the provision of anonymous crypto 'wallets' is prohibited

Lemme guess, more technologically illiterate fuddy-duddies are hastily scribbling the proposed legislation without understanding what the hell they're talking about again (probably still using quill and ink, no doubt).   

Good luck enforcing that one.   

[jseverson]

Good luck enforcing that one.   

Yeah, it seems like they're mixing up wallets with crypto service providers.

Providers will need collect cryptocurrency holders' name, address, official personal document number, customer ID number or date and place of birth.

"At present, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules," the EC said in a statement.

"The proposed reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers."

The cryptocurrency proposal outlines future obligations on all Virtual Asset Service Providers (VASPs) "to collect and make accessible data concerning the originators and beneficiaries of the transfers of virtual or crypto assets they operate."

The EC is concerned that differences in AML/CFT laws among EU member nations is exploited by organized crime for money laundering and terrorism financing. 

"Transfers of virtual assets fall today outside of the scope of Union legislation on financial services," the proposal stated. "The lack of such rules leaves holders of crypto-assets exposed to money laundering and financing of terrorism risk."

It's looking like they're just enhancing existing KYC regulations. Every entity handling crypto within their jurisdiction will have to collect their users' data now. Regulators probably know that there's no reasonable way of regulating non-custodial wallets.

[SFR10]

The plans also point to cash limitations of €10,000 ($11,777),

I wouldn't even consider that a workaround, let alone a solution to terrorism financing.
^{- This will just force them to do their stuff with more accounts and in smaller batches.}

"Limiting high cash payments makes it difficult for criminals to launder dirty money.

Exactly, it only makes it harder; in other words, it does not prevent it ^{[I believe that defeats its purpose to a large extent]}.

[decodx]

In other words, "welcome KYC to every fucking platform that uses crypto transactions."
As if that will stop criminals and terrorists... Just like that. Poof! And they are gone.

[NeuroticFish]

meaning transactions involving currencies such as Bitcoin, Ethereum, and Ripple will soon be fully traceable.

Did those politicians took a look onto any block explorer? Are any transactions hidden there?

future wallet setups will involve giving up your personal data to the government.

While it's not unexpected at all that custodian wallets (i.e. businesses) may have to gather and hand out identities, I don't think that this can be enforced on proper wallets.

It may end up as a good thing: custodian wallets will no longer be able to claim they don't know whose money they've lost when an indent happens and people may learn to keep the bigger amounts on proper wallets, maybe hardware wallets too.

[electronicash]

Since the source is website for gaming (not cryptocurrency) and doesn't tell much, i have 2 question,
1. Does it affect non-custodial and open-source cryptocurrency wallet?
2. Will authority take any action against non-custodial and open-source cryptocurrency wallet (such as block their website)?

that would be troublesome if these noncustodial wallets or open-source wallets will be clampdown by authorities so they'd be obligated to ask KYC from its users.

It's always about terrorism that they could force companies to do all things as if they have really shown us proof that there really are terrorists paying BTC for whatever weapons they bought. Terrorists are not dumb to see bitcoin is leaving traces on the ledger.

[stompix]

Yeah, it seems like they're mixing up wallets with crypto service providers.

Yeah, they have mixed the banning of the actual wallet with banning the offering and facilitating of transactions from anonymous wallets to financial services inside the EU, that's all, but it takes one dumb tweet to make things blow out of proportion.

The whole proposal of the directive is about enforcing AML/KYC rules , nothing more

The anonymity of crypto-assets exposes them to risks of misuse for criminal purposes. Anonymous crypto-asset wallets do not allow the traceability of crypto-asset transfers, whilst also making it difficult to identify linked transactions that may raise suspicion or to apply to adequate level of customer due diligence. In order to ensure effective application of AML/CFT requirements to crypto-assets, it is necessary to prohibit the provision and the custody of anonymous crypto-asset wallets by crypto-asset service providers.

Credit institutions, financial institutions and crypto-asset service providers shall be prohibited from keeping anonymous accounts, anonymous passbooks, anonymous safe-deposit boxes or anonymous crypto-asset wallets as well as any account otherwise allowing for the anonymisation of the customer account holder

[kano]

As stated before, but again, yet another bullshit proposal.
It has nothing to do with anti-terrorism, it has only to do with anti-crypto.
Crypto is a very small % of such illegal transactions.

[davis196]

Anonymous cryptocurrency wallets?Are they talking about cold storage wallets?
Are there any anonymous cryptocurrency wallets in existence?Almost all online wallets require ID verification.
If the EU decides to ban cold storage wallets,then we might have a problem.The people will be forced to store their BTC into centralized online wallets,which support KYC.I have nothing against KYC,but what happens with the coins,if such services go bankrupt or turn into exit scams?
"Not your keys,not your coins."

[stompix]

Anonymous cryptocurrency wallets?Are they talking about cold storage wallets?
Are there any anonymous cryptocurrency wallets in existence?Almost all online wallets require ID verification.

Cough..Binance..cough! 
And there are more, especially little ones that need traffic, plus the way that was constructed in the draft it labels every service that offers any kind of wallet as a provides, and this will mean every single service from which you can withdraw after a deposit will be required to do KYC, even betting websites, all to save us from terrorist and money laundering.

Just wait for it, I'm pretty sure they will come up with more stupid shit, probably the new one will be to do a KYC verification even if you buy online from shop with BTC, of course, the SSDs and 16 GB of ram I've bought semi-anonymously (they still got my delivery address)  are posing a threat to national security.

But for the moment no, the news was exaggerated, we have a few years till they go full retard!

[Ozero]

Anonymous cryptocurrency wallets?Are they talking about cold storage wallets?
Are there any anonymous cryptocurrency wallets in existence?Almost all online wallets require ID verification.
If the EU decides to ban cold storage wallets,then we might have a problem.The people will be forced to store their BTC into centralized online wallets,which support KYC.I have nothing against KYC,but what happens with the coins,if such services go bankrupt or turn into exit scams?
"Not your keys,not your coins."

It seems to me that a decent way out of any situation can be found. Most likely, these will be wallets that people will use to pay for goods and services. No one will prohibit us from using other wallets that will be used to store our cryptocurrency.
In addition, the controlled amount for transactions of more than 10,000 euros is actually a lot and most of us will not be affected by these innovations. However, in general, it should be expected that governments will try to control the cryptocurrency, and if they fail, then restrict its circulation.

[decodx]

It seems to me that a decent way out of any situation can be found. Most likely, these will be wallets that people will use to pay for goods and services. No one will prohibit us from using other wallets that will be used to store our cryptocurrency.

I don't see how they could do that, even if they want to.
Cryptocurrencies have been on the fringe of the law from the very beginning. Regulators are aware that the ban cannot bring them anything good because then all traffic will go into the dark and they will not be able to control it in any way.

[DooMAD]

Turns out it wasn't much of a hit.  The market seems to have recovered pretty quickly, so I assume that either means people aren't overly concerned, or perhaps that some more bullish news has taken priority.

[Jawhead999]

Seems like this is the reason why Binance limiting their withdrawal limit from 2 BTC to 0.06 BTC and force all his user to complete basic verification, however many people could still use DEX and wouldn't worried about KYC problem.

Fiat money could be used for money laundering too and the amount is more bigger than Bitcoin, but seems many journalist only focus about the bad side of Bitcoin and close their eyes to bad side of Fiat.