EU Proposes Law To KYC All Wallet Transfers

[Cyprustr]

This is more serious than it seems.

I think they are after Trezor and Ledger companies.

https://www.nasdaq.com/articles/eu-proposes-law-to-kyc-all-wallet-transfers-2021-07-20

 

[Sols]

Did anyone really expect EU and others to leave crypto unregulated forever? Crypto is money.‌ Money is regulated.

Expect privacy coins to be slowly but surely outlawed, until we're left‍ with "clean cryptos" that can be regulated and that can flow freely within EU financial⁠ institutions and "dirty cryptos" that aren't allowed. Exchanges will stop accepting them.

 

[newNomad]

So the dirty crypto will plummet on risks of being outlawed?
And the clean crypto‌ will plummet on the basis of having no purpose since just a being a simil‍ to fiat/metals?

 

[backpacker]

1. In case of crypto having it's only purpose⁠ as a tool of anonymity then, unfortunately, Yes.
   
2. In case of crypto being the alternative⁤ of choice to fiat and its digital variants, then the answer is No.
   

Every legitimate⁣ and clean holder of a major cryptocurrency should be glad about this sort of regulation⁢ since it will solve problems to turn fiat into crypto and vice versa.
This forum︀ is an excellent place to study the various difficulties people face regarding crypto: Be it︁ purchasing/holding/transacting/cashing out - nothing goes smooth! With a clear cut regulation these problems will all︂ be gone.

It will also not take long anymore and all the "I Hold︃ Physical"-goldbugs will face major problems to exchange their secretly stored "safe-haven asset" into anything︄ useful.

 

[JackAlabama]

what is "legitimate" and "clean" holder in the eye of the gov according to your opinion?︂

It goes like this in the eu.
Did you pay cap gains on it 50%,︃ ok, youre good to go until next year where we take another 20% or 70%︄ of the increased value as we see fit.
Only then will you be a *clean*︅ holder until our next change where you better comply.

These two companies might need to︆ move out of eu soon or just stop. You can actually build a hardware wallet︇ all by yourself so there is no need for trezor/ledger GitHub - cryptoadvance/specter-diy: DIY airgapped︈ hardware wallet that uses QR codes for communication with the host

What is becoming clearer︉ to see for anyone is the highly problematic state of the eu which actually increases︊ seemingly at a more and more exponential pace.

 

[legrant]

No one is going after Trezor or Ledger, that makes 0 sense, they just provide‌ hardware wallets. You can do the same without a Trezor or Ledger in a few‍ seconds, all you need is a mnemonic code generator and that's it. What they're probably⁠ going after is any business accepting crypto for their products/services, forcing them to do KYC⁤ on customers so they're able to know who's spending money, what is the person buying,⁣ when is it being bought, the amount, and the source of the funds.

 

[JackAlabama]

Op stated: "I think they are after Trezor and Ledger companies."

That is just what I have written above, and put a link to a hardware wallet︀ which you build DIY and with opensource software 😉

Most probably they try that, but this︁ an equally futile exercise as any merchant can easily accept funds with opensource, selfhosted software︂ as well like this one here
https://btcpayserver.org/

 

[Martin Everson]

I read the below article yesterday on cointelegraph regarding this.

https://cointelegraph.com/news/new-...ighten-regulations-for-sending-cryptocurrency
They are talking about‌ including personal details on crypto transfers itself 😳.

 

[JackAlabama]

hehe that will be funny when all sensitive info is being written in each transaction which‌ actually is trivial to do Adding custom data to bitcoin transaction – Cloud Invent

It seems the lobbyists just try to replicate swift with a caveat of how they will‍ be able to enforce that. They have to bring the miners to stop every transaction⁠ which does not have these info in it.
And then we have lightning. How can⁤ this be enforced there?
Being an eu bureaucrat is a tough job.

 

[Tr0nad0r]

They aren't after Trezor and Ledger, instead, this is intended to target all the transfers‌ happening online.

Btw, this isn't just a theoretical proposal, many of the biggest players in‍ the space are involved already and they have a team of engineers working actively on⁠ the implementation:

https://www.coindesk.com/us-crypto-giants-build-first-version-of-fatf-compliant-travel-rule-tool

 

[Silvio]

Great, so in the end we will have a "currency" that is BOTH fully transparent,‌ AND not-anonymous since KYC will be provided everywhere as well. It's the EU dictator's dream‍ ... a banking system that is even more restrictive and less secret than what we⁠ have right now.

 

[backpacker]

Absolutely correct. It is the transaction they are‍ interested in. The idea behind it is simple: At some point in life you want⁠ to do something with your secretly stored crypto-wealth.
The popular understanding of crypto always surprises⁤ me: A fully digital "thing" can never be secret. The initial idea of crypto was⁣ not anonymity. Sataoshi (or who ever that whitepaper wrote) wanted to provide an alternative store⁢ of value which can not be inflated by governments. That's the base idea - nothing︀ more, nothing less.
Yes, because it is all︂ digital. Very easy to block, monitor and restrict.
The vast majority of the population wants︃ a Nanny-state, supervision and total control by the government. Current COVID restrictions are an excellent︄ example.
Anonymity is a thing of the past and we better get used to the︅ "new normal". We are in the digital age where everybody post everything about his boring︆ life on social media. How then can anybody today still expect privacy in its true︇ meaning ... ?!
Nevertheless, there is still sufficient room to navigate within the legal boundaries︈ of the "System" and it always will be. That is the nature of every "System".︉ However, it definitely helps to have personally experienced life in the USSR or one of︊ its socialist satellite states.

 

[khinkali]

I don't think they're talking about putting the person's details in the blockchain. That would‌ be illegal in the EU anyway.

The VASP stuff is most obvious for example where‍ you send money from Coinbase to Gemini. They have to pass on your private information,⁠ which requires them both to fall under privacy regulation as well as KYC regulation. This⁤ is basically the same requirement as for Barclays sending your money to Santander (I believe⁣ the threshold is $3000 in USA). VASPs and other obliged entities currently include financial services⁢ institutions, estate agents, gambling providers, and "other persons trading in goods over EUR 10,000".

There are similar regulations in many countries about, for example, buying or selling a car for︀ cash. The car dealer has to take your private information and hold it in case︁ the government want it. Should an ecommerce store or service provider expect the reporting thresholds︂ to tighten? I Think so. If you are selling any product or service for over︃ 1000 USD/EUR then you can expect an "obligation to obtain, hold, and transmit required originator︄ and beneficiary information, immediately and securely" before long.

Will they go further? Some governments hate︅ physical cash and want to end it. India tried famously (and badly) to remove high︆ denomination bank notes but Scandinavia have been demonetising successfully. My guess is that they'll not︇ go as far as banning private wallets, but that VASPs and other obliged entities won't︈ be allowed to transact with them.

 

[LegitBananas]

One word: Monero

"but... but... the exchanges will be forced to shut it down!"

Atomic swaps.

https://www.forbes.com/sites/kellyp...k-monero-other-privacy-coins/?sh=78339a1885cc

 

[Martin Everson]

https://cointelegraph.com/news/sec-...rrency-falls-under-security-based-swaps-rules

 

[LegitBananas]

There will always be workarounds and ways to‌ cover your tracks.. They can make laws all they want, crypto is here to stay‍ and in many cases outlawing and/or regulating something only strengthens it or increases demand. Whether⁠ it's DEX, P2P, atomic swaps, people will find a way to make it work. If⁤ anything, this news is bullish for XMR which is really the only fungible coin in⁣ the top 100 (main property of cash).

 

[Nishizawa]

Non-Custodial Crypto Wallets Not Covered by Proposed Prohibition, Clarifies European Commission

This regulation does not‌ apply to private wallet. Mandating KYC to VASPs such as centralized exchanges, custodians, and most‍ are already doing so.

New rules for Bitcoin & Co: My proposals for︀ the EU crypto regulation - Sven Giegold - Mitglied der Grünen Fraktion im Europaparlament

Sadly, Big Brother is already trying. The silver lining, XMR-BTC atomic swap is technically possible now.︁ Neither are securities, so they are not under the jurisdiction of the SEC.

SEC Chair︂ Says Bitcoin Is Not A Security

Regulators say they will regulate decentralized transactions, but it︃ is questionable whether they will be able to create an effective policy. It is unreasonable︄ to apply the existing framework to a DEX without a middleman. If the regulations were︅ made hastily, someone would take it to court.

 

[Martin Everson]

Yes there is a work around for most things in⁢ life. But often the legality of such workarounds may be an issues and will certainly︀ put the average law abiding person off 😕.

I just wonder if they will introduce︁ circuit breakers in crypto trading like they have on stock exchanges. If they take out︂ the wild volatility from crypto trading then most speculators will leave the crypto space I︃ think. Crypto without wild volatility is like a P**N flick without sex sadly 😕.

 

[backpacker]

No, will not happen.
Think that‍ way: Crypto is money. There are no cricuit breakers in the FX market, except simple⁠ CB interventions. There are also no circuit breakers in the commodity market, specifically precious metals,⁤ for the very same reason.
It is not the intention of governments to protect a⁣ retail investors' crypto investment. Governments just want to control and tax it.

 

[Martin Everson]

You are free to‌ think whatever way you like..lol. But what matters is what the SEC thinks. I think‍ SEC will disagree with your broad statement on crypto 🙁. Extract is below but read⁠ the full article.

https://markets.businessinsider.com...ecoins-fall-under-security-swaps-rules-2021-7

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The US Securities and Exchange Commission's chair, Gary⁤ Gensler has indicated stablecoins and other security-backed tokens will not be exempt from the regulator's⁣ upcoming rule changes.

Gensler told the American Bar Association Derivatives and Futures Law Committee's virtual⁢ mid-year program on Wednesday that stablecoin issuers would need to register with the regulator and︀ ensure certain levels of transparency in how they transact.

"Make no mistake: It doesn't matter︁ whether it's a stock token, a stable value token backed by securities, or any other︂ virtual product that provides synthetic exposure to underlying securities," Gensler said.

"These platforms - whether︃ in the decentralized or centralized finance space - are implicated by the securities laws and︄ must work within our securities regime," he said.

Stablecoins, which are crypto coins pegged to︅ an asset such as the dollar, such as Tether, have come under greater scrutiny from︆ regulators given their potential for destabilizing payments systems.

Transparency is a big topic in the︇ crypto-space as digital tokens are popular, in part because of their decentralized nature, and the︈ relative anonymity they afford their users.

But the US regulator has started to clamp down︉ on some aspects of the crypto market to prevent the use of these coins in︊ illicit activities, such as money laundering. The SEC also sued Ripple Labs late last year︋ over sales of its network's XRP token, which the regulator said should be treated as︌ a security and not a currency.

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