Lawmakers plan to get down to any attempts at anonymous crypto transactions, cutting off unregulated exchanges and operators Bitcoin ATMs. This plan involves outlawing private anonymous Bitcoin wallets.
In today's article, we will not only discuss what just happened in the European Parliament, but also explain that the bill is in phase one of three. We will try to estimate when it is likely to come into force. We will also discuss what anonymous Bitcoin wallets are and the distinctions between them, which the bill is expected to ban soon.
European Union lawmakers today voted in favor of controversial measures banning anonymous Bitcoin transactions, which the crypto industry says will stifle innovation and violate investor privacy. Both investors using exchanges and Bitcoin ATMs Bitcoin will suffer. Most of all, they don't want anonymous crypto wallets.
According to documents accessed by CoinDesk, more than 90 lawmakers voted in favor of the proposal.
The proposals aim to extend anti-money laundering (AML) requirements that apply to conventional payments above PLN4643 (€1,000) to the crypto sector.
Once the law is in place, the payers and recipients of even the smallest crypto transactions would absolutely have to be identified. We mean transactions related to wallets, which are private, because there are no regulated operators behind it.
The decisions further discussed in the bill could result in the complete disconnection of unregulated cryptocurrency exchanges from the conventional financial system.
National governments announced in December that they want to eliminate the €1,000 (PLN4,649) threshold for cryptocurrencies, as crypto-investors can easily circumvent this limit and include private wallets that are not operated by regulated crypto asset providers.
The law aims to ban anonymous cryptocurrency wallets and remove KYC limits that currently amount to about €1,000, or about PLN 4,648 (depending on the country). Before we move on and start discussing the content of the bill, we'll be interested in what all these anonymous cryptocurrency wallets are in the first place:
Electrum is one of the most anonymous wallets available on the market in 2022. It offers privacy features and helps ensure the security of bitcoin privacy. This anonymous wallet stores your private keys securely on your computer.
All bitcoin transactions are public, traceable and permanently stored on the bitcoin network. Bitcoin addresses are the only information used to determine where bitcoins are allocated and where they are sent. Yes, a bitcoin wallet can be traced. Unless it's an unconnected wallet, or a paper wallet.
Answer: You can opt to use Bitcoin ATMs, which allow you to purchase Bitcoin anonymously for cash. Examples are Bitcoin ATMs IN THE CENTER OF WARSAW. Of course, any attempt to break the law via Bitcoin ATMs is forbidden, and exceeding the KYC limits will result in investor identification. Other platforms, such as ShapeShift, BitQuick and LocalBitcoins.com, Paxful and DameCoins, allow anonymous bitcoin trading via PayPal, credit cards, Western Union and bank transfers.
The main problem with Bitcoin relates to the wallet where your Bitcoin is stored. Cryptocurrency wallets are usually pseudonymous, not anonymous. Anonymity is about being "nameless." - comes from the Greek word meaning "without a name."
Instead of a name, your wallet gives you a fake name, an alias. However, once your wallet is linked to you, you become less anonymous than with a bank account. In fact, Bitcoin never claimed to be an anonymous currency. BTC was supposed to be, and is, decentralized, but not anonymous. Satoshi Nakamoto made Bitcoin non-anonymous by design to prevent hidden, illegal crime.
Using Bitcoin to make payments does not mean that your transactions are hidden from the world. Because Bitcoin is built on the blockchain, which is a public ledger, the address of your crypto wallet is visible to everyone.
Bitcoin ATMs ensure that the transaction takes place through an anonymous exchange, exactly the same as exchanges. Cryptocurrencies such as Bitcoin are in part anonymous; as such, Bitcoin ATMs retain this anonymity when used. Smaller transactions don't require a very thorough verification process, further enhancing anonymity. Of course, the bill we're talking about today will turn off this anonymity. Is that a good thing or a bad thing? Perhaps it will stop some of the crime? Talk about it ON THE TELEGRAM CHANNEL with other bitmachine users.
Bitcoin address trail allows linking all money to illegal online drug sales tracked by FBI and Interpol. No Bitcoin ATMs operator supports the freedom of drug trafficking and other forms of crime. If you try to circumvent the law in this way, you will eventually be caught.
Also harming Bitcoin is the fact that criminal activities associated with it are leading to laws outlawing anonymous wallets. If Bitcoin's privacy shortcomings drive users away, the currency could lose value.
After completing a transaction on LocalBitcoins, you can transfer your coins to an anonymous Bitcoin wallet. If you feel you want even more anonymity, use a secure VPN (virtual private network) connection when performing Bitcoin transactions and use Bitcoin ATM cryptocurrencies.
Monero, which has been around since 2014, is one of the earliest crypto coins to introduce the concept of private and anonymous transactions using digital currency. It has since been joined by the likes of ZCash, Dash, Verge, Grin, ByteCoin and Firo, to name a few.
Members of the center-right European People's Party (EPP) opposed many of the more controversial changes, denouncing what they called a "de facto ban on self-service wallets."
"Such proposals are not justified."
- EPP economic spokesman Markus Ferber said in an emailed statement Thursday.
"With this approach to regulating new technologies, the European Union will continue to lag behind other, more open jurisdictions."
The legislation has been condemned by major industry players, including cryptocurrency exchange Coinbase (COIN), and by lawyers who say the excessive privacy violations could be challenged by rival EU lawmakers, who say the new AML privacy-restrictive law could undermine Europe's competitiveness by discouraging blockchain innovation.
Bitcoin (BTC) is
"really cool, but I don't think crime is cool."
"Crypto deserves a better reputation and to disassociate itself from its ties to the criminal world."
On Wednesday, Fabio Panetta, a member of the European Central Bank's executive board, called for less tolerance of cryptocurrencies, which he compared to gambling. However, Kanko, an advocate of banning private, anonymous wallets, seems to disagree with this controversial opinion.
"I'm surprised by the reaction," she said. "I don't think bitcoin is necessarily bad. I just think people are using bitcoin to do illegal things."
She says she "admires" the innovative thinking of people active in the market - and even quotes members of her own family who follow it. But just as well, she said, some people misuse anonymous payments to finance crimes, citing drugs, prostitution, child pornography and terrorism.
Kanko said she understands those who have legitimate reasons for not wanting the government to eavesdrop on every small purchase they make.
- I completely understand you," she said.
"My role as a politician, as a legislator, is to listen to the people, understand legitimate concerns and take that into account when making laws."
But he denies claims, such as those made by Coinbase CEO Brian Armstrong in a recent tweet, that the legislation establishes a "crypto-surveillance system" and "counteracts innovation, privacy and law enforcement."
"The law is embedded in the laws that are already in place, and your rights will be respected," he added.
She said, citing the tough data protection law known as the RODO.
The package of proposals seeks to expand anti-money laundering requirements that apply to conventional payments above €1,000 ($1,114) in the cryptocurrency sector, and mandate the identification of payers and recipients of even the smallest crypto transactions, including those with anonymous Bitcoin wallets.
Further measures under discussion could cut off unregulated cryptocurrency exchanges from the conventional financial system.
Kanko said she enjoys reading feedback and talking to the cryptocurrency community. She was delighted with the lively debate she took part in Wednesday in the Belgian city of Leuven, just a few kilometers from the European Parliament headquarters in Brussels, where she describes cryptocurrency enthusiasts as warm, charming and intelligent.
As her proposal neared finalization, however, she said the reaction toward her became aggressive.
"This is not constructive," she said.
"If you really want your point of view to be taken into consideration, just go to the lawmakers and talk to them. But if you insult and threaten me, it won't help your cause."
Her arguments are unlikely to have cryptocurrency supporters such as the Blockchain lobbying group, which warned shortly after our interview that Kanko's venture threatens the future of cryptocurrencies in the EU industry.
The European Parliament's approach
"will lead to inadequate consumer protection, huge privacy concerns, reduced European competitiveness and lost opportunities for better enforcement at the European level."
said the lobbying group in a press release, calling for action toward a more permissive approach to private, anonymous crypto wallets favored by national EU finance ministers.
Kanko does not expect to win everyone's support.
"Only the best possible balance can be achieved in law," she - she said. "You can't please everyone."
A separate legal proposal, also discussed today, would stop transfers to crypto providers that are not regulated by the state. This includes to those who operate in the EU without authorization, or who are not affiliated or based in any jurisdiction.
Thursday's vote to ban crypto privacy came despite objections from major industry players such as Coinbase and legal experts who warned that overly heavy privacy violations could face legal challenges in EU courts.
Under the new regulations, Coinbase will have to report to authorities whenever a customer receives more than €1,000 worth of cryptocurrencies from their own wallet, anonymous or not, the exchange's CEO Brian Armstrong warned in a tweet published Wednesday.
The plans must also be agreed upon by both parliament and national ministers, who meet in the EU Council, in order to be enacted.
Bitcoin's price fell by about 2% in a matter of minutes as the vote came in, dropping from $47,500 to $46,400. Could this be an opportunity to buy the so-called "dip"? At Bitcoin ATMs Shitcoins.club in Warsaw, buy Bitcoin today at a promotional commission of 2%.
And now for the most important part. Articles of this type usually talk about upcoming regulations, but don't say how certain they are, when they will take place, etc. Let's dig deeper into the topic to answer these questions.
For the bill to pass, it must go through 3 phases. The bill is currently in Phase 1, the phase related to the European Commission's decision.
After the vote, the regulation can be moved to a plenary vote by 705 European lawmakers from 27 member states.
If it goes through Phase 1, it could end in a preliminary agreement on draft legislation. This agreement will be between the EU institutions and will be informal.
The final phase will then require formal approval from each of the three EU institutions.
In summary, the law related to limiting the privacy of crypto investors must pass through 3 institutions before it is approved. For now, it's in Phase 1. Before Russia's armed assault on Ukraine, it was reasonable to assume that the law could go into effect in early 2023, since that's how long it took to enact similar laws that were already nested in existing law, however (the current law is an extension of the AML law, not a new draft). However, let's also take into account that the crypto community is likely to apply pressure, and the deadline could change many more times.
However, in today's climate of armed conflict, the EU may take up the bill on an emergency basis. Everyone would certainly prefer the outlawing of private, anonymous Bitcoin wallets if it meant stopping Russia's funding of bloodshed, but is this bill really going to do that? Share your opinion on the subject on the GROUP ON TELEGRAM bringing together the crypto investment community.