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EU Proposes Law To KYC All Wallet Transfers

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Sols

Staff member
Mentor Group Gold
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

Active Member
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?
 

Bagpacker

Active Member
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?
  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 forum is an excellent place to study the various difficulties people face regarding crypto: Be it purchasing/holding/transacting/cashing out - nothing goes smooth! With a clear cut regulation these problems will all be gone.

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

JackAlabama

Entrepreneur
  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 forum is an excellent place to study the various difficulties people face regarding crypto: Be it purchasing/holding/transacting/cashing out - nothing goes smooth! With a clear cut regulation these problems will all be gone.

It will also not take long anymore and all the "I Hold Physical"-goldbugs will face major problems to exchange their secretly stored "safe-haven asset" into anything useful.
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 to move out of eu soon or just stop. You can actually build a hardware wallet all by yourself so there is no need for trezor/ledger GitHub - cryptoadvance/specter-diy: DIY airgapped hardware wallet that uses QR codes for communication with the host

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

legrant

New member
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

Entrepreneur
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.
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 wallet which you build DIY and with opensource software ;)

Most probably they try that, but this an equally futile exercise as any merchant can easily accept funds with opensource, selfhosted software as well like this one here
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
I read the below article yesterday on cointelegraph regarding this.


They are talking about including personal details on crypto transfers itself :oops:.

Under this proposal, service providers conducting transfers must have the name of the originator of the transfer, the account number, where the account exists and where it is used to process the transaction. The originator’s address, official personal document number, customer ID number, or date and place of birth would also be required under the proposal. Service providers would similarly need to ensure that the name and account number of the beneficiary are included with the transfer, along with information about where that account exists. The beneficiary’s crypto-asset provider would also need procedures in place to detect whether the information for the originator of the transfer is included or is missing.
 

JackAlabama

Entrepreneur
I read the below article yesterday on cointelegraph regarding this.


They are talking about including personal details on crypto transfers itself :oops:.
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

Active Member
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:


The first version of a proposed solution to this problem has been built by a team of engineers from BitGo, Coinbase, Gemini, Kraken and Fidelity, all members of the U.S Travel Rule Working Group (USTRWG).
 

maxmmm

Entrepreneur
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.
 

Bagpacker

Active Member
They aren't after Trezor and Ledger, instead, this is intended to target all the transfers happening online.
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 - nothing more, nothing less.
a banking system that is even more restrictive and less secret than what we have right now.
Yes, because it is all digital. Very easy to block, monitor and restrict.
The vast majority of the population wants a Nanny-state, supervision and total control by the government. Current COVID restrictions are an excellent example.
Anonymity is a thing of the past and we better get used to the "new normal". We are in the digital age where everybody post everything about his boring life on social media. How then can anybody today still expect privacy in its true meaning ... ?!
Nevertheless, there is still sufficient room to navigate within the legal boundaries 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 of its socialist satellite states.
 

khinkali

Entrepreneur
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 for cash. The car dealer has to take your private information and hold it in case the government want it. Should an ecommerce store or service provider expect the reporting thresholds to tighten? I Think so. If you are selling any product or service for over 1000 USD/EUR then you can expect an "obligation to obtain, hold, and transmit required originator and beneficiary information, immediately and securely" before long.

Will they go further? Some governments hate physical cash and want to end it. India tried famously (and badly) to remove high denomination bank notes but Scandinavia have been demonetising successfully. My guess is that they'll not go as far as banning private wallets, but that VASPs and other obliged entities won't be allowed to transact with them.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Atomic swaps.


“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.”
 

joseph15

Active Member

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

New member
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.

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.

New rules for Bitcoin & Co: My proposals for 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 Chair Says Bitcoin Is Not A Security

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

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
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).

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

I just wonder if they will introduce circuit breakers in crypto trading like they have on stock exchanges. If they take out the wild volatility from crypto trading then most speculators will leave the crypto space I think. Crypto without wild volatility is like a porn flick without sex sadly :confused:.
 

Bagpacker

Active Member
I just wonder if they will introduce circuit breakers in crypto trading like they have on stock exchanges.
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

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Think that way: Crypto is money.

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.



--- quote start

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 and ensure certain levels of transparency in how they transact.

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

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

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

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

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


----- quote end
 
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