All crypto-asset transactions must be confirmed by European crypto asset service providers, who will verify sender and recipient information.
This morning, the European Union has agreed to limit all anonymous cryptocurrency transactions made by exchanges, including those made by self-hosted wallets. The payers and payees of all transactions must be identified, as this standard applies to all transactions.
The partisan vote
The European Union Funds Transfer Regulation is being amended to combat money laundering (TFR). It applies to any cryptocurrency transaction with a value greater than 1000 euros.
In December, EU ambassadors expressed interest in lifting the minimum limit on private cryptocurrency transactions, citing the ease with which the limitation could be circumvented.
Today’s vote has been tight, and the two main concessions have been approved by a margin of 58 to 52 and 62 to 51, respectively. The proposals were supported by Renovación and the Socialists and Democrats but were defeated by the right-leaning European People’s Party (EPP).
The economic spokesman of the EPP, Markus Ferber, considers that these initiatives are neither necessary nor proportionate. With this rule, the EU will fall further behind other more open nations in the world.
In a statement, the party claimed “the de facto restriction on autonomous wallets”.
Impact on the industrial sector
The vote was met with opposition from cryptocurrency exchanges like Coinbase. In a blog post published Monday, General Counsel Paul Grewal described a “surveillance regime” targeting his exchange and others.
According to Gregwal, exchanges would not be able to meet the new identity verification requirement for non-hosted wallets as they lack the necessary infrastructure. It would be necessary to obtain a large amount of information from non-customers.
In the opinion of Patrick Hansen, vice president of business development at Defi wallet Unstoppable Finance, the laws will stop the expansion of the sector.
In his words, “the vast majority of crypto businesses will not be able or willing to interact with non-hosted wallets.”
Following the Canadian Freedom Convoy rally and the outbreak of the Russo-Ukrainian war, the government has stepped up its efforts to fight cryptocrime.
In Canada, Japan, and Singapore, Coinbase is now asking for beneficiary details. A US senator has proposed legislation that would subject crypto program designers to criminal prosecution if they are found to aid illegal activity.
According to the founders of Chainalysis and Elliptic, cryptocurrencies are not an acceptable solution to avoid penalties or manage illegal payments. This is due to the fact that its public ledger, which records all transactions, is extremely transparent.
