• Latest
‚Don’t Be Lulled‘ as European Commission Mulls a Crypto KYC Trap

‚Don’t Be Lulled‘ as European Commission Mulls a Crypto KYC Trap

Juli 31, 2021
6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine

6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine

März 31, 2023
Judge denies SEC motion to keep Hinman docs secret in Ripple case

Judge denies SEC motion to keep Hinman docs secret in Ripple case

März 31, 2023
The ultimate guide to Miami – Cointelegraph Magazine

The ultimate guide to Miami – Cointelegraph Magazine

März 31, 2023
Dr. Jane Thomason – Cointelegraph Magazine

Dr. Jane Thomason – Cointelegraph Magazine

März 31, 2023
1658007797 celsius is bankrupt with 12b balance sheet hole su zhu.jpg

Celsius is bankrupt with $1.2B balance sheet hole, Su Zhu returns to Twitter and OpenSea purges 20% of employees: Hodler’s Digest, July 10-16

März 31, 2023
6 Questions for Lisa Fridman of Quadrata – Cointelegraph Magazine

6 Questions for Lisa Fridman of Quadrata – Cointelegraph Magazine

März 31, 2023
Jed McCaleb empties XRP wallet after eight-year selloff

Jed McCaleb empties XRP wallet after eight-year selloff

März 31, 2023
Celsius has finally filed for bankruptcy: Law Decoded, July 18-25

Celsius has finally filed for bankruptcy: Law Decoded, July 18-25

März 31, 2023
The ‘godfather of crypto’ risked lifetime in jail, laying foundation for Bitcoin – Cointelegraph Magazine

The ‘godfather of crypto’ risked lifetime in jail, laying foundation for Bitcoin – Cointelegraph Magazine

März 31, 2023
SEC objects to XRP holders aiding Ripple defense

SEC objects to XRP holders aiding Ripple defense

März 31, 2023
Blockchain technology is transforming the real estate market – Cointelegraph Magazine

Blockchain technology is transforming the real estate market – Cointelegraph Magazine

März 31, 2023
1658612147 nfts banned in minecraft sec lists 9 tokens as securities.jpg

NFTs banned in Minecraft, SEC lists 9 tokens as securities and 3AC founder blames cockyness for company meltdown: Hodler’s Digest, July 17-23

März 31, 2023
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
CoinNewsDaily
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
CoinNewsDaily
No Result
View All Result
Home Business

‚Don’t Be Lulled‘ as European Commission Mulls a Crypto KYC Trap

coinnewsdaily by coinnewsdaily
Juli 31, 2021
in Business
0
‚Don’t Be Lulled‘ as European Commission Mulls a Crypto KYC Trap
191
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

'Don't Be Lulled' as European Commission Mulls a Crypto KYC Trap 101
Source: Adobe/kravik93

The European Commission (EC) claims that it is not targeting non-custodial cryptocurrency wallets; however, their new set of legislative proposals would still have an impact on such users, in addition to having an overall negative impact on the nascent cryptocurrency industry as a whole.

Related articles

IoTeX’s MachineFi Lab challenges Big Tech by democratizing IoT to benefit users and businesses

IoTeX’s MachineFi Lab challenges Big Tech by democratizing IoT to benefit users and businesses

Juli 26, 2022
ygg sea surpasses 10,000 scholarships in just six months of launch

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

Mai 6, 2022

Niklas Schmidt, a lawyer and partner with the Austrian law firm Wolf Theiss, told us that “in the context of an overhaul of the EU’s anti-money laundering rules, the European Commission – in a desperate power struggle – wants to tighten the thumbscrews on cryptoassets, such as Bitcoin (BTC).”

“Don’t kid yourself and don’t let yourself be lulled into sleep,” warned Compliance Advisor at Dutch bitcoin exchange Bitonic, Simon Lelieveldt.

Those proposing these rules would require any entity transferring cryptoassets, similar to what is already required for wire transfers – and this so-called „travel rule“ was introduced by the Financial Action Task Force (FATF) in June 2019 and is currently being considered by the U.S. Congress.

Schmidt asserted that the European Commission now wants EU Member States to implement it in order to achieve complete traceability of cryptographic transactions.

CASPs (cryptoasset services providers), as opposed to VASPs (virtual asset services providers), are what he considers to be „typical of the EU’s bureaucratic approach,“ according to him (virtual asset service providers).

According to Schmidt,

“In the long run, this rule – if adopted – would likely lead to a bifurcation between fully compliant (and thus very expensive) centralized crypto actors such as centralized exchanges (CEXes) and a parallel universe of non-compliance consisting of alternatives such as decentralized exchanges (DEXes).”

The limited scope with far-reaching impact

The proposal itself does not apply to peer-to-peer (P2P) transfers of cryptoassets nor to transactions involving a cryptoasset services provider (CASP) and an „unhosted wallet“ (just a regular crypto wallet where a user is in control of the private keys).

Affected transactions include cryptoasset transfers involving CASPs and other businesses, such as various payment service providers.

However, if the proposal is implemented, cryptocurrency exchanges would still be required to report if a customer is sending cryptoassets to a „unhosted wallet“ if they suspect that the transaction is fraudulent.
At the same time, a transfer from this type of wallet will not be accepted unless the customer has performed due diligence on the transaction.

AML regulations would apply to CASPs, which include crypto-to-fiat exchanges as well as crypto to crypto exchanges. As a result, CASPs would be subject to customer due diligence and would be required to report any suspicious transactions, whether they occurred during the course of a business relationship or during an isolated transaction.
Receiving cryptocurrency from „unhosted wallets“ is included in this category.

It is stated in the proposal that a „preventive approach“ will be taken in full compliance with the free movement of capital.
For the time being, the Commission considers it „appropriate“ to develop a system that would require payment service providers and CASPs to include information on the originator and beneficiary of each cryptocurrency transfer.

According to them, this is done in order to „ensure the transmission of information throughout the payment or transfer of cryptoasset chain.“

Member States, on the other hand, should be able to exempt from this regulation certain domestic low-value transfers of funds, such as low-value transfers of cryptoassets, that are used for the purchase of goods or services, provided that the transfer can always be traced back to the payer / beneficiary.

The obligation to verify the accuracy of the information about the originator and the beneficiary should be imposed only on individual transfers that exceed EUR 1,000 (USD 1,188), unless the following conditions are met:

  • the transfer appears to be linked to other transfers which together would exceed EUR 1,000;
  • cryptoassets have been received or paid out in cash or in „anonymous electronic money“;
  • there are reasonable grounds for suspecting money laundering or terrorist financing.

This is done so the efficiency of payment systems and crypto-asset transfer services wouldn’t be impaired, argues the proposal, and to „balance“ the risk of driving transactions underground as a result of „overly strict identification requirements against the potential terrorist threat posed by small transfers of cryptoassets.“

‚A major intrusion on human rights‘

“The EU is fully taking all FATF principles on board. While they technically may not prohibit self-hosted wallets the trick is to be found in the obligation under article 58 to verify and KYC [know-your-customer] the beneficiary of wallets,” Simon Lelieveldt told CoinNewsDaily.

He added that this is the same “trick” that the Dutch Central Bank (DNB) pulled in the Netherlands to achieve almost the same goal.

As reported in May, a court order obtained by Bitonic succeeded in forcing the DNB to scrap its controversial wallet verification requirement.

This is big time gallery play.

— Simon Lelieveldt (@finhstamsterdam)

The European Banking Authority (EBA) has been calling out DNB for frontrunning FATF rules, said Lelieveldt, emphasizing paragraph 54 of the 2020 interim report of the FATF, which reads:

“The launch of new virtual assets however could materially change the ML/TF risks, particularly if there is mass adoption of a virtual asset that enables anonymous peer-to-peer transactions. There are a range of tools that are available at a national level to mitigate, to some extent, the risks posed by anonymous peer-to-peer transactions if national authorities consider the ML/TF risk to be unacceptably high. This includes banning or denying licensing of platforms if they allow unhosted wallet transfers, introducing transactional or volume limits on peer-to-peer transactions or mandating that transactions occur with the use of a VASP or financial institutions.” [Emphasis added.]

The report update also notes that “denying licensing of VASPs if they allow transactions to/from non-obliged entities (i.e., private / unhosted wallets) (e.g., oblige VASPs via the ‘travel rule’ to accept transactions only from/to other VASPs).”

Therefore, per Lelieveldt, the EU is forcing beneficiary KYC for P2P wallets as for safe deposit boxes, “for which it doesn’t make sense.”

Providing further insight in his Twitter threads, Lelieveldt argued that the reason we ended up with the travel rule on banking and now crypto too is because it’s “a tool to avoid and duck proper applicability of legal duties by government entities that wanted to free ride big data without caring about privacy,” describing it as the government imposing ransomware onto its citizens and financial institutions.

He also called the EU package “a major intrusion of human rights,” arguing that that is the reason the European Data Protection Board (EDPB) sent the EC a letter on the protection of personal data in the AML-CFT legislative proposals last May.

The EDPB told Cryptonews.com that,

The EC “has taken due note of our letter and of the concerns expressed therein and we are confident they will strive to address them within the next steps of the legislative process.”

The legislative package will now be discussed by the European Parliament and Council. Also, the EC hopes that the new EU-level Anti-Money Laundering Authority (AMLA) should be operational in 2024. But it would start its work of direct supervision „slightly later, once the Directive has been transposed and the new regulatory framework starts to apply.“ AMLA would be the central authority coordinating national authorities „to ensure the private sector correctly and consistently applies EU rules.“

Tags: bankingBitcoinBTCcrypto-asset transfer servicesEuropean ParliamentKYCPayment systemsPrivacyregulatory
Share76Tweet48
Previous Post

Who takes gold in the crypto and blockchain Olympics?

Next Post

Coin Race: Top Winners/Losers of July; Bitcoin, ETH Jump, DOGE Drops

coinnewsdaily

coinnewsdaily

CoinNewsDaily.com is an online Crypto Coin News Website that aims to provide latest trendy news from market and around the world.

Related Posts

IoTeX’s MachineFi Lab challenges Big Tech by democratizing IoT to benefit users and businesses
Business

IoTeX’s MachineFi Lab challenges Big Tech by democratizing IoT to benefit users and businesses

Juli 26, 2022
ygg sea surpasses 10,000 scholarships in just six months of launch
Alt Coin

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

Mai 6, 2022
5 projects enabling smart contract development on bitcoin
Alt Coin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022
cross chain services play a crucial role in facilitating continued adoption of defi applications
Alt Coin

Cross-Chain Services Play a Crucial Role in Facilitating Continued Adoption of DeFi Applications

April 26, 2022
justin sun launches usdd, integrating the blockchain world and the real world with the decentralized stablecoin
Alt Coin

Justin Sun Launches USDD, Integrating the Blockchain World and the Real World with the Decentralized Stablecoin

April 25, 2022
what are wrapped tokens?
Bitcoin

What Are Wrapped Tokens?

April 23, 2022
Load More
Next Post
Coin Race: Top Winners/Losers of July; Bitcoin, ETH Jump, DOGE Drops

Coin Race: Top Winners/Losers of July; Bitcoin, ETH Jump, DOGE Drops

Kategorien

  • Alt Coin
  • Bitcoin
  • Business
  • Ethereum
  • ICO
  • Litecoin
  • Mining
  • NFT
  • Ripple
  • Tech
  • Trading

What New here?

  • 6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine
  • Judge denies SEC motion to keep Hinman docs secret in Ripple case
  • The ultimate guide to Miami – Cointelegraph Magazine
  • About Us
  • Contact Us
  • Privacy & Policy

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

Please enter CoinMarketCap Free Api Key to get this plugin works.
✕
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev