EU Parliament Votes to Impose Privacy Breaking Crypto KYC Rules
The EU Parliament has voted in favor of controversial rules to outlaw anonymous crypto transactions, which the crypto industry believes will slow down innovation and invade privacy.
Over 90 European Union lawmakers voted in favor of the proposal, according to CoinDesk report.
According to the new rules, payers and recipients of even the smallest crypto transactions would need to be identified, including for transactions with un-hosted or self-hosted wallets. There is an on-going discussion whether unregulated crypto exchanges would be cut off completely from the traditional financial system.
Last December, national governments voiced interest to scrap the existing EUR 1,000 threshold for crypto, on the basis that digital payments can easily circumvent the limit, and also to include private wallets that aren’t operated by regulated crypto asset providers.
Members of the center-right European People’s Party (EPP) were against many of the more controversial changes, calling it a “de facto ban of self-hosted wallets.”
EPP economic spokesperson, Markus Ferber, commented:
“Such proposals are neither warranted nor proportionate. With this approach of regulating new technologies, the European Union will fall further behind other, more open-minded jurisdictions.”
Another proposal which was discussed, would stop transfers being made to “non-compliant” crypto service providers, which includes those operating in the EU without authorization or established in any jurisdiction.
Several major industry participants, including crypto exchange Coinbase, and legal experts, were against the move and warned that severe privacy violations could face legal challenges in EU courts.
According to the new rules, crypto exchanges would have to report to the authorities any time a customer received over EUR 1,000 of crypto from a self-hosted wallet, as pointed out by Coinbase CEO Brian Armstrong.
In order to pass the new rules into law, both the parliament and national ministers must agree to it.
As soon as the news on the matter broke, Bitcoin price dropped. At the time of writing, BTC trades at $44,592, down 5.4% on the daily chart.
