Last month, two committees in the EU Parliament voted in favour of measures that would require exchanges to submit details of customers who use self-hosted wallets. The rule openly advocates for cryptocurrency users to be discriminated against in comparison to fiat users, while also creating a surveillance regime that is antithetical to EU privacy laws.
In April, Coinbase CEO Brian Armstrong told his 1 million Twitter followers that exchanges are pushing back on the measure because it will usher in a surveillance regime for crypto.
The latest draft by Parliament of the Transfer of Funds Regulation treats crypto, and every person who holds crypto, differently from fiat.
Every crypto transaction (and not just those with a 1,000 euro threshold, as is the case with fiat) would be ‘travel rule eligible.
According to Reuters, crypto firms are pushing back on the highly controversial rule. Reuters reports that 46 industry leaders and organisations in Europe sent a letter to 27 EU finance ministers. In the letter, the firms ask to ensure that regulators do not adopt any rules that go beyond those already covered by the Financial Action Task Force (FATF) and its standards to combat money laundering.
Dated April 13, the letter diplomatically warns that requiring the disclosure of transaction details and wallet addresses of users would put crypto owners at risk and reduce their privacy and safety.
In response to the Markets in Crypto Assets (MiCA) regulations package which would regulate issuers and service providers in the EU, the letter asks for decentralised financial projects (DeFi) be excluded from the framework’s requirements.
Jean-Marie Mognetti, the CEO of CoinShares and organiser of the letter, said that Europe’s complex crypto regulations are hampering businesses from growing in the region and stifling innovation. Another organiser, DeFi Technologies chief security officer Diana Biggs, said that the crypto industry could do more in influencing the drafting of new policies.
There hasn’t been strong enough or coordinated efforts across our industry in Europe.
The EU Undermines Its Work on Privacy Laws
This is not the first time the European Union has attempted to stifle the sector’s growth. Back in March, the EU proposed to impose a de-facto ban on Bitcoin Proof-of-work mining. The ban did not pass, partly because it was revealed that regulators were acting on misguided beliefs about proof-of-work carbon emissions – all of which were proven to be false by compiled data from analytics firm, Messari.
Today, the EU is proposing to eviscerate all the work it has done to be a global leader in privacy laws and policy. By disproportionately punishing cryptocurrency users for exercising the same rights as fiat-currency holders, the EU is eroding individual liberty in deeply sinister and concerning ways.
The EU is proposing to enshrine bad policy into European law.
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