Goodbye, privacy, goodbye, it was nice while it lasted.

[Poker Player]

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

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.

[LFC_Bitcoin]

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.

[franky1]

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?

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

[LFC_Bitcoin]

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.

[franky1]

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

[LFC_Bitcoin]

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 instant 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

Perfect, thank you for such detailed responses man.

[darkangel11]

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.



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.

[TheBeardedBaby]

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.

[Bitstar_coin]

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.

[Mauser]

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.

[Poker Player]

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

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

[Poker Player]

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

[o_e_l_e_o]

Here is the most important part:

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.

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:

(8) ‘crypto-asset service provider’ means any person whose occupation or business is the provision of one or more crypto-asset services to third parties on a professional basis;

(9) ‘crypto-asset service’ means any of the services and activities listed below relating to any crypto-asset:

  (a) the custody and administration of crypto-assets on behalf of third parties;
  (b) the operation of a trading platform for crypto-assets;
  (c) the exchange of crypto-assets for fiat currency that is legal tender;
  (d) the exchange of crypto-assets for other crypto-assets;
  (e) the execution of orders for crypto-assets on behalf of third parties;
  (f) placing of crypto-assets;
  (g) the reception and transmission of orders for crypto-assets on behalf of third parties
  (h) providing advice on crypto-assets

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.

[Leviathan.007]

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.

[KevinMiles]

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!

[Zilon]

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

[dothebeats]

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 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.

[slackovic]

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 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.

[pooya87]

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!

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

[PrivacyG]

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