Anti-anonymity or anti-freedom? EU bans crypto transfers on non-hosted wallets

On March 31, the European Union voted for from banning all anonymous crypto transactions. Transactions of all sizes, both payers and recipients of even the smallest identified payment of digital assets, would be subject to this lawsuit. In general, IIt could be a huge blow to cryptocurrency privacy advocates in Europe.

Anti-anonymity rules

The ECON and LIBE committees voted to approve an anti-money laundering amendment to the EU Transfer of Funds (TFR). It would require crypto service providers – usually exchanges – to verify the identities of the owners of unhosted wallets they transact with prior to a transaction. It applies to conventional trades over 1000 EUR for the entire crypto sector.

Small margins have been achieved in today’s vote, with the two relevant compromises of 58/52 and 62/51respectively. In general, the left-wing Renew and S&D parties voted in favor of the changes, while the right-wing European People’s Party (EPP) voted against.

The party called the latest changes a “de facto ban on self-hosted wallets”. The next step required the new legislation to go through trilogues between representatives of the European Parliament, the European Council and the European Commission as early as mid-April.

Against anonymity… or freedom?

Not surprisingly, these developments faced significant backlash from the Council and Commission and individual crypto enthusiasts worldwide. As a result, transactions between unhosted wallets and cryptocurrency exchanges would become much more difficult and expensive.

Something that the CEO of San Francisco-based crypto exchange Coinbase, Brian Armstrong, warned about. He saw this legislation as “anti-innovation, anti-privacy and anti-law enforcement.”

In addition, Tether and Bitfinex CTO Paolo Ardoino thought that the aforementioned lawsuit represented a ‘big step backwards for human rights’. Needless to say, other enthusiasts echoed similar concerns regarding this regulatory decision.

In addition, the Crypto Council for Innovation raised red flags.

“If finally approved, these new measures will create fundamental privacy, innovation and access problems.”

Source: CCIA

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