It seems that China is not the only government that wants to stand up to Bitcoin. Europe wants to track all cryptocurrency operations. To this end, the European Commission has presented this week a legislative proposal that contemplates require cryptocurrency exchanges like Binance to include their customers' personal data. With this law, and in pursuit of greater transparency and traceability of crypto payments, the Wallets anonymous accounts would be banned in the EU (where anonymous bank accounts are already banned).
Europe vs Bitcoin
Although Europe already has rules to fight money laundering, the laws proposed this week would expand that bureaucracy to "the entire cryptocurrency sector, forcing all service providers to perform due diligence with their customers," according to has announced this week by the European Commission. Officials also want to limit all cash payments to 10.000 euros in all Member States, which will make it difficult to move large amounts of money. EU countries with lower limits will be able to keep them.
Mairead McGuinness, European Commissioner responsible for Financial Services, Financial Stability and Capital Markets Union:
"Money laundering is a clear and current threat to citizens, democratic institutions and the financial system"
“The scale of the problem cannot be underestimated and loopholes need to be closed that criminals could exploit. Today's package significantly intensifies our efforts to prevent dirty money from circulating through the financial system. "
The European Commission vs Bitcoin
The commission has suggested the creation of an Anti-Money Laundering Authority (AMLA) in order to ensure compliance with these regulations. This unit will work directly with financial institutions and it will monitor "some of the riskiest financial institutions operating in a large number of Member States or requiring immediate action to deal with imminent risks".
"Every new money laundering scandal is one more scandal, and a wake-up call that our work to fill the gaps in our financial system is not yet over," said Valdis Dombrovskis, EU Trade Commissioner.
'We have come a long way in recent years and our EU [anti-money laundering] rules are now among the strictest in the world. But now they need to be applied consistently and closely monitored to make sure they are actually being met. That is why today we take these bold steps to close the door on money laundering and prevent criminals from lining their pockets with ill-gotten gains«.
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Personal data of users of exchanges
The proposed changes in EU law would force companies transferring Bitcoin or other crypto assets to collect data about the recipient and the sender. According to the European Commission, the proposals they would make crypto assets more traceable and help curb money laundering and terrorist financing.
Under the proposals, a company transferring crypto assets for a client would be required to include their name, address, date of birth, and account number, as well as the name of the recipient.
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End of Wallets anonymous
The new rules would also prohibit offering anonymous crypto wallets. The proposals could take two years to become law. The Commission has argued this week that crypto asset transfers should be subject to the same anti-money laundering rules as wire transfers.
"Given the Virtual asset transfers are subject to money laundering and terrorist financing risks similar to those of wire transfers… It seems logical, therefore, to use the same legislative instrument to address these common issues, 'the Commission wrote.
While some crypto asset service providers are already covered by anti-money laundering regulations, the new proposals' would extend these rules to the entire cryptocurrency sector, forcing all service providers to apply due diligence to their customers, 'explained the Commission.
David Gerard, author of Attack of the 50 Foot Blockchain, has declared that this regulation "only intends to apply the existing rules to cryptocurrencies, in force since 2019", as we can read on the BBC. And he continues: "if you want to make real money, you have to follow the rules of real money." Gerard believes that, although it is a series of European proposals, their impact would go much further.
France already proposed this month to give more power to the European Securities and Markets Authority (ESMA), based in Paris, and make it responsible for the supervision of cryptocurrencies throughout the EU. French regulators strongly believe that cryptocurrencies need EU-wide regulation.
To become law, the proposals will need the agreement of the Member States and the European Parliament. If Europe goes ahead with the proposed legislation, it is expected to take effect from 2024.
