Spain's most anti-privacy and anti-crypto law comes into force.

[Cuenta Alternativa]

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

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

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

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

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

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

Hacienda de España conocerá todo sobre ti si compras bitcoin en exchanges centralizados

[1714481411]

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[Dr.Bitcoin_Strange]

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

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

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

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

[franky1]

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

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

[un_rank]

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

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

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

- Jay -

[The Cryptovator]

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

[mendace]

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

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

[sokani]

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

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

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

[Die_empty]

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

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

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

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

[tiCeR]

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

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

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

[tabas]

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

[Don Pedro Dinero]

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

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

Really? Here is the law.

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

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

«Artículo 39 ter. Obligación de informar sobre operaciones con monedas virtuales.

1. Las personas y entidades residentes en España y los establecimientos permanentes en territorio español de personas o entidades residentes en el extranjero, que proporcionen servicios de cambio entre monedas virtuales y moneda fiduciaria o entre diferentes monedas virtuales, intermedien de cualquier forma en la realización de dichas operaciones o proporcionen servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales, vendrán obligadas a presentar una declaración informativa anual referente a las operaciones de adquisición, transmisión, permuta y transferencia de monedas virtuales, sea cual sea la contraprestación pactada, en su caso, así como los cobros y pagos realizados en dichas monedas, en las que intervengan o medien, en los términos que establezca la orden ministerial por la que se apruebe el modelo correspondiente.

Translation:

"Article 39b. Obligation to report transactions in virtual currencies.

1. Persons and entities resident in Spain and permanent establishments in Spanish territory of persons or entities resident abroad, which provide exchange services between virtual currencies and fiat currencies or between different virtual currencies, intermediate in any way in the performance of such transactions or provide services to safeguard private cryptographic keys on behalf of third parties, for holding, storing and transferring virtual currencies, shall be required to submit an annual information return on transactions involving the acquisition, transmission, exchange and transfer of virtual currencies, whatever the amount in exchange, if any, as well as receipts and payments made in.

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

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

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

That is the one thing that OP got wrong and the other thing is that in many cases a single law really isn't the problem.

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

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

I think that's not even new to the most that have been using centralized exchanges. They keep our records and transaction data whether it's been for a year or two.

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

[Despairo]

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

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

as no other tax legislation has gone this far.

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

[Sayeds56]

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

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

[mindrust]

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

[YUriy1991]

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

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

Hacienda de España conocerá todo sobre ti si compras bitcoin en exchanges centralizados

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

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

[Merit.s]

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

[moneystery]

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

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

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

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

[Jawhead999]

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

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

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

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

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

[Crypt0Gore]

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

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

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

[siniminomorocomunisakito]

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

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

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