cryptoshitcompra.com/wp-content/uploads/2021/07/Don’t-se-adormezca-while-the-European-Commission-reflecting-about-una.jpg »alt =» »Non lasciarti cullare» between the European Commissione rimugina su a crypto trappola KYC 101 ″ class = »content-img» /> Source: Adobe / kravik93
Although the European Commission (EC) says it does not target non-custodial crypto wallets, its new set of legislative proposals would still affect those users and the entire nascent industry.
Niklas Schmidt, a lawyer and partner at the Austrian law firm Lobo iss , told Cryptonews.com that “in the context of a review of EU rules against money laundering, the European Commission, in a desperate struggle for power, wants to tighten the screws of crypto assets, such as Bitcoin (BTC) ».
“Don’t be fooled and don’t get lulled,” warned the compliance consultant at the Dutch bitcoin exchange. Bitonic , Simon Lelieveldt.
Under these proposed rules, any entity that transfers cryptocurrencies must collect and store details about senders and recipients, similar to what already applies to wire transfers, and this so-called ‘travel rule’ was introduced in June 2019 by Grupo de Acción. Financial (GAFI).
Now, the European Commission wants EU member states to implement it to achieve full traceability of cryptocurrency transfers, Schmidt said.
What he describes as “typical of the EU bureaucratic approach” is the use of the term CASP (crypto asset service providers) as opposed to the FATF’s VASP (virtual asset service providers).
According to Schmidt,
“In the long run, this rule, if adopted, would likely lead to a fork between fully compliant (and therefore very expensive) centralized crypto players such as centralized exchanges (CEX) and a parallel universe of default consisting of alternatives such as decentralized exchanges (DEX) «.
lawyer stressed that it remains to be seen if the proposal will go through the legislative process.
Limited range with powerful impact
proposal itself does not apply to peer-to-peer (P2P) cryptocurrency transfers or transactions involving a cryptocurrency service provider (CASP) and a ‘non-hosted wallet’ (just a normal cryptocurrency wallet in which a user has control of the keys).
Its scope is limited to cryptocurrency transfers involving CASP and other companies, such as various payment service providers.
However, if the proposal is implemented, cryptocurrency exchanges would still have to report whether a customer sends cryptocurrency to an ‘unhosted wallet’ if they find it suspicious. At the same time, a transfer from this type of wallet cannot be accepted without due diligence from the client.
Since CASPs, which include crypto-fiat and crypto-crypto exchanges, would be included among the entities covered by the new Anti-Money Laundering Regulation (AML), they would be subject to customer due diligence and would declare suspicious transactions, both when establish a commercial, commercial relationship, both when carrying out an occasional transaction. This includes receiving cryptocurrencies from ‘non-hosted wallets’.
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same proposal speaks of a “preventive approach” in full compliance with the free movement of capital. He considers it “appropriate” to create a system that requires payment service providers and CASPs to include information about the originator and beneficiary of each crypto transfer.
y say this is to “ensure the transmission of information during payment or on-chain transfers of cryptocurrencies.”
Member States, however, should have the possibility to exempt from this regulation certain national transfers of low-value funds, such as transfers of low-value cryptocurrencies, used for the purchase of goods or services, provided that it is always possible to trace. to the transfer to the payer / beneficiary.
Where verification has not yet been carried out, the obligation to verify the accuracy of payer and payee information should only be imposed on individual transfers that exceed 1000 EUR (1188 USD), unless:
- the transfer seems to be linked to other transfers that together would exceed € 1,000;
- the cryptocurrencies have been received or paid for in cash or ‘anonymous electronic money’;
- there are reasonable grounds to suspect money laundering or terrorist financing.
This is done so that the efficiency of payment systems and cryptocurrency transfer services are not compromised, the proposal argues, and to ‘balance’ the risk of clandestine transactions due to ‘too stringent identification requirements against a possible terrorist threat ». places of small transfers of cryptocurrencies «.
“A major interference with human rights”
‘ EU is taking fully into account all the principles of the FATF. While they can’t technically ban self-hosted wallets, the trick is the Article 58 requirement to verify and KYC [know-your-customer] the recipient of the wallets, “said Simon Lelieveldt Cryptonews.com.
He added that this is the same “trick” that the Dutch central bank (DNB) fired in the Netherlands to achieve almost the same goal.
As reported in May, a court order obtained by Bitonic managed to force the DNB to remove its controversial wallet verification requirement.
This is a great arcade game.
– Simon Lelieveldt (@finhstamsterdam)
European Banking Authority (EBA) asked DNB to abide by the FATF rules, Lelieveldt said, noting paragraph 54 of the 2020 FATF interim report, which law:
“ launch of new virtual assets, however, could fundamentally change the risks of ML / TF, particularly if there is a mass adoption of a virtual asset that allows anonymous transactions between peers. re are a number of tools available at the national level to mitigate, to some extent, the risks posed by anonymous peer-to-peer operations if national authorities consider the ML / TF risk to be unacceptably high. This includes prohibiting or licensing platforms if they allow unhosted wallet transfers, by introducing transactional or volume limits on peer-to-peer transactions, or by requiring that transactions be made with the use of a VASP or financial institution. [Emphasis added.]
report is also updated Notes that ‘deny licensing of VASPs if they allow transactions to / from non-obligated entities (eg, private / non-hosted wallets) (eg, forcing VASPs through the’ travel rule ‘ to accept transactions only from / to other VASPs)). «
refore, for Lelieveldt, the EU is forcing the beneficiary KYC to use P2P wallets and safe deposit boxes, “for which it does not make sense”.
Providing more information in his threads, Lelieveldt argued that the reason why we ended the travel rule in banking services and now also in cryptocurrencies is because it is “a tool to avoid and evade the correct enforceability of legal duties on the part from government entities who wanted to exploit big data for free without worrying. of privacy ‘, describing it as the government that imposes ransomware on its citizens and financial institutions.
It also has the EU package called “a serious interference with human rights”, arguing that this is the reason European Data Protection Board (EDPB) sent the EC a letter on the protection of personal data in the AML legislative proposals -CFT last May.
EDPB said Cryptonews.com That,
EC “has taken due note of our letter and the concerns expressed in it and we trust that they will endeavor to address them in the next stages of the legislative process.”
legislative package will now be debated by the European Parliament and the Council. Furthermore, the EC expects that the new EU level Anti-Money Laundering Authority (LRD) is expected to come into operation in 2024. But it would start its direct supervisory work ‘shortly thereafter, once the Directive has been transposed and the new regulatory framework enters into force. ‘ AMLA would be the central coordinating authority for national authorities ‘to ensure that the private sector applies EU rules correctly and consistently’ .____
See Bitcoin speaker, author, and educator Andreas M. Antonopoulos argue that privacy is a human right.
____ To find out more: – European Commission clarifies what ‘anonymous cryptocurrency wallets’ means – EU-funded fund mocks the drive to invest in ‘digital assets’ with surprising move.
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– DeFi Sector Could Be Threatened By New EU Crypto Regulations – Survey – Regulators Must Make A Sea Change In Cryptocurrencies And IMF Is Ready To Compromise
– US Digital Assets Bill ‘Measured Fairly’ But Raises Civil Rights Concerns – Lawyer – ‘Big News in Global Cryptocurrency Policy’ as FATF Releases Can Around October