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Bitcoin EU The Almighty Buck

EU Plans To Make Bitcoin Transfers More Traceable (bbc.com) 82

Posted by BeauHD from the full-traceability dept.
Proposed changes to EU law would force companies that transfer Bitcoin or other crypto-assets to collect details on the recipient and sender. The BBC reports: The proposals would make crypto-assets more traceable, the EU Commission said, and would help stop money-laundering and the financing of terrorism. The new rules would also prohibit providing anonymous crypto-asset wallets. The Commission argued that crypto-asset transfers should be subject to the same anti-money-laundering rules as wire transfers. "Given that virtual assets transfers are subject to similar money-laundering and terrorist-financing risks as wire funds transfers... it therefore appears logical 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 rules, the new proposals would "extend these rules to the entire crypto-sector, obliging all service providers to conduct due diligence on their customers," the Commission explained. Under the proposals, a company transferring crypto-assets for a customer would be obliged to include their name, address, date of birth and account number, and the name of the recipient. To become law the proposals will need the agreement of member states and the European Parliament. The proposals could take two years to become law.
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EU Plans To Make Bitcoin Transfers More Traceable More

EU Plans To Make Bitcoin Transfers More Traceable

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  • Prohibit anonymous wallets?! Have they gone mad? (Score:3, Insightful)

    by Gavino ( 560149 ) on Tuesday July 20, 2021 @09:09PM (#61602993)
    It's crypto. It's anti-censorship at its core. They would have to ban personal computers and the Internet as well. Good luck with that.

    • Re:Prohibit anonymous wallets?! Have they gone mad (Score:5, Insightful)

      by Lisandro ( 799651 ) on Tuesday July 20, 2021 @09:50PM (#61603107)

      Oh, just watch them do it.

      All the EU has to do is mandate exchanges to implement proper identity management; at the end of the day, all crypto needs to be converted to hard cash in order to be useful.

      • True. The real wonder is that they have let it be so long without doing it.

        • Re: (Score:2)

          by gweihir ( 88907 )

          True. The real wonder is that they have let it be so long without doing it.

          Not very much. Despite what its proponents claim, the "cryptocurrency" thing is tiny. Also, you already have declare all cryptocurrency "assets" in many European countries and pay taxes on it. Lying there can get you sent to prison.

      • That's not necessarily true. Already there are many economic subjects using cryptocurrency even in its current imperfect form. There is the possibility, expectation even from some, that development will eliminate many of its drawbacks, making it suitable for general use.

    • Re:Prohibit anonymous wallets?! Have they gone mad (Score:5, Insightful)

      by rtb61 ( 674572 ) on Tuesday July 20, 2021 @10:19PM (#61603169) Homepage

      For bitcoin to be actually worth anything in the real world, you eventually have to swap it for real money and they got you by the balls on that, not to mention the transactions are entirely traceable on the internet.

      This law, effectively a ban on crypto because it kills its criminal business model. Just a start, you have been repeatedly warning. Countries are bringing out their own and they will not tolerate competition. No matter what you say, that cripples the value of bitcoin and explains the crash, insiders where fully aware of law changes and dumped their coin.

      You schmucks are being played by professional hedge fund managers, they just be playing with the price of bitcoin to screw the mug punters over and it will get worse and worse.

      • Re: (Score:3, Interesting)

        by yes-but-no ( 4133651 )
        crypto is bad not because of the criminal business model; I am sure only a tiny fraction of users (of any users after-all) use that for buying drugs/weapons. The deeper problem is the ponzi. A baseless belief that crypto will make one rich quick. It's a mania like tulip or y2k web startups.

        A mania doesn't need any rational beliefs or support system. It just grows because people (ie dumb ones) believe so. Only when a critical mass of folks stop believing, the crash happens. The bubble will burst on its ow

      • Until Cryptocurrencies can generate new wealth while not burning through huge amounts of energy I am uncomfortable touching them. The problem is theyâ(TM)ll always be power hogs.

        As to the argument traditional finances burn through just as much, via people needing to run the offices to manage them, well Bitcoin would suffer the same once it became mainstream enough, in addition to the computational energy burn.

        Anyone with a half a brain and a view of the regulatory history of financial markets, knew it

      • meanwhile, in the real world.
        Criminals will continue using crypto the way they were before exchanges pooped up.

        drugs in money out.

      • For bitcoin to be actually worth anything in the real world, you eventually have to swap it for real money

        That wasn't the initial vision. The vision was the seller would accept bitcoin in exchange for a product, no third parties or currency involved. Some number of vendors do this. I have no idea how common it is or how well it works in practice.

    • Re:Prohibit anonymous wallets?! Have they gone mad (Score:5, Interesting)

      by rsilvergun ( 571051 ) on Tuesday July 20, 2021 @10:34PM (#61603185)
      They don't need to ban it from a practical standpoint. Was like this are usually there so that when you catch someone obviously laundering money you can lay on extra charges. It also becomes an effective tool for breaking up money laundering rings.

      This is always been a matter of time. If People actually wanted crypto to be except as the legitimate currency these sort of things are essential. Currencies don't have any intrinsic value so they need heavy regulation or they collapse under the weight of market manipulation. The problem is crypto is not a very good currency. Proof of work uses too much electricity and is too slow and proof of stake is too easily manipulated.

      This is a death knell for cryptocurrencies. They're basic design makes them useless or what any legitimate person would want a currency to do. Give me extremely high energy and electronics resources needed to keep these markets going I can't say I'm going to miss them. It'll be nice to be able to buy a graphics card again for less than 10 times MSRP.

    • No, they're not banning private wallets. You can do whatever you want in your crypto toy economy, but as soon as you want to interact with the EU economy of real goods and services, you have to be prepared to show the same documentation as anyone else.

      If you've cleverly erased how you got your zeroblindedbitdoggytoken, congratulations, you've shot yourself in the foot when it comes to interacting with the legal economy.

    • Here, watch me do it:

      All crypto exchanges are now considered financial institutions. They are required to follow all the same rules as banks, stock brokers, and investment houses. This means they must follow the Know Your Customer rules and keep the information on file. Failure to follow these rules are serious crimes and will result in large financial penalties and possible prison time for employees, managers, and executives

      • Re: (Score:2)

        by gweihir ( 88907 )

        Indeed. Act like a bank, be a bank. Or get sent to prison. Next step: crypto exchanges will need a banking license and that one is typically pretty hard to get. May not matter much, because most will not be able to fulfill the currently upcomming requirements at all. Also note that the "prison time" thing makes this personal for everybody involved, no hiding behind a company.

        • I'm not sure of the EU banking rules, but here in the U.S. the fines are rather impressive as well. The company can be fined. The executives can be fined. The manager(s) can be fined. The individual doing it can be fined. Even if one doesn't spend a few years in prison, bein fined hundreds of thousands of dollars possibly millions of dollars makes it personal as well.

          • Re: (Score:2)

            by gweihir ( 88907 )

            Not disputing that. But "prison time" has the advantage that no matter how much money you have, you are going behind bars. So even rich CEOs find that threat pretty impressive.

    • Re: (Score:1)

      by gweihir ( 88907 )

      It's crypto. It's anti-censorship at its core. They would have to ban personal computers and the Internet as well. Good luck with that.

      Laws against money-laundering come with pretty steep penalties for non-compliance. This will happen. It may kill the "crypto-currency" stupidity though. That would be a good thing.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Enjoy your boot loader locked tablet running something for which the EU has the master crypto keys pleb. (it won't be any better in the US either)

      If they find thy can't control money supply any other way they absolutely will ban the 'personal' part of personal-computer.

    • Re: (Score:2)

      by dnaumov ( 453672 )

      It's crypto. It's anti-censorship at its core. They would have to ban personal computers and the Internet as well. Good luck with that.

      Nope, they just have to mandate prison time for anyone not complying with relevant crypto regulation. People generally like to avoid prison.

  • Another daily shitcoin article. (Score:1)

    by Anonymous Coward

    Twice on the front page, in fact.

    No one cares.

  • But then how will big companies pay their crypto ransoms?

    Are really expecting the hacking groups to start going through KYC to receive payments??

    • Re:but but (Score:5, Interesting)

      by Luckyo ( 1726890 ) on Tuesday July 20, 2021 @09:46PM (#61603097)

      No, they are expecting that companies will be unable to pay the ransom, which will remove incentive to commit those crimes in the first place. Just like ransomware was not a major problem before cryptocurrencies existed.

      Remove the main facilitator of certain kind of crime, remove most of that kind of crime.

    • Re:but but (Score:4, Interesting)

      by jarkus4 ( 1627895 ) on Wednesday July 21, 2021 @07:20AM (#61603985)

      They will pay by hiring overseas (so unregulated) "consultants" to "help them decrypt the data" aka pay the ransom for them. Those companies already exist and help in jurisdictions that prohibit paying ransoms. The only change will be them moving to some unregulated country.

      https://features.propublica.or... [propublica.org]

  • time to sell those coins ? (Score:3)

    by swell ( 195815 ) <jabberwock@poetic.com> on Tuesday July 20, 2021 @09:34PM (#61603057)

    With prices already plummeting, this threat could spoil the market for a large portion of Bitcoin users. It's not just the EU, but other countries who perceive a problem with the technology will soon follow.

    But don't panic just yet. This is a 'proposed' legislation and they've got the wrong impetus: "stop money-laundering and the financing of terrorism". Yeah, sounds good if you are new to this sort of thing but it won't get the votes. The correct impetus that will bring in the votes is: "to protect the children".

    • Reading some EU articles on the subject, it seems like pretty much a foregone conclusion; they feel a need to address an estimated 1% of the econonmy that is “black money.” This should do enough to crypto currencies to really make their value for illicit activity go to zero.

    • Re: (Score:2)

      by MrL0G1C ( 867445 )

      'votes' - MEPs are voting on this and EU MEPS don't give a damn what their constituents want, they have proven that many times by voting against the wishes of EU citizens.

      If this goes to EU parliament then I see no reason why it wouldn't pass, why would MEPs care about cryptocurrencies?

  • Bitcoiners should welcome the news! (Score:5, Insightful)

    by Anonymous Coward on Tuesday July 20, 2021 @09:51PM (#61603117)

    Bitcoin proponents have always wanted Bitcoin to be a "legitimate" currency, right?

    Well, just like all other legitimate currencies, it has be adhere to regulation and such, so the Bitcoin bros should all be ecstatic that it's being recognized by being regulated.

    • Well, just like all other legitimate currencies, it has be adhere to regulation

      What "regulation" does fiat currency have to adhere to?

      I just paid three dollars today in cash. I didn't have to give the merchant my name, address, or phone number, they took the three dollars and I walked out with my drink.

      When I was overseas I was able to trade it for various trinkets from vendors of whatever sort I like, again no disclosure of who I was...

      Criminals use cash all the time in ways that "regulations" would frow

      • What "regulation" does fiat currency have to adhere to?

        There's plenty of them.

        I just paid three dollars today in cash. I didn't have to give the merchant my name, address, or phone number, they took the three dollars and I walked out with my drink.

        But that's cherrypicking. - there's multiple scenarios where this is not true. For example, if you paid more than $10,000 in cash, you're legally required to file a Form 8300 report with the IRS. Never mind using a credit/debit card, or a transfer instead.

        The government doesn't really care about your $3 because the amount is small, they have a very good idea where it came from, and the seller will be taxed anyway down the line.

      • What "regulation" does fiat currency have to adhere to?

        Here in the United States, there is FINRA, Bank Secrecy Act, USA PATRIOT Act,Truth in Savings Act, Electronic Fund Transfer Act, and Expedited Funds Availability Act, Office of Foreign Assets Control (OFAC) sanctions, and others.

        I just paid three dollars today in cash. I didn't have to give the merchant my name, address, or phone number, they took the three dollars and I walked out with my drink.

        You got those three dollars from somewhere. If you earned it, it was reported to the IRS. If you cashed a check, the check is documentation. If it was in a bank, it was reported to the IRS. If you withdrew it from an ATM, there is a record of it. The cashier rang it up on a cash r

  • Good for them. (Score:4, Interesting)

    by Rick Schumann ( 4662797 ) on Tuesday July 20, 2021 @10:16PM (#61603163) Journal
    Perhaps this is the beginning of the end for something that was a bad idea to begin with.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Perhaps this is the beginning of the end for something that was a bad idea to begin with.

      Hopefully. I have some insight on what requirements Banks actually have to go through. Most crypt exchances will not be able to implement even a fraction of that. They can only either shut down or have their people become internationally wanted criminals in short order.

  • This does not suprise me (Score:3)

    by jonwil ( 467024 ) on Tuesday July 20, 2021 @11:29PM (#61603249)

    If there is one thing governments around the world seem to hate, its things that allow their citizens to transfer money (or things that are as good as money) where the governments can't find out who was doing the transfer.

    • If there is one thing governments around the world seem to hate, its things that allow their citizens to transfer money (or things that are as good as money) where the governments can't find out who was doing the transfer.

      like cash?

  • Comment removed (Score:3, Insightful)

    by account_deleted ( 4530225 ) on Wednesday July 21, 2021 @01:57AM (#61603431)
    Comment removed based on user account deletion

  • Financial privacy rights? (Score:5, Interesting)

    by bradley13 ( 1118935 ) on Wednesday July 21, 2021 @03:21AM (#61603581) Homepage

    So, I live in Europe. And I really applaud the increasingly strong privacy legislation here, like the GDPR. What I don't understand is simply this: why do governments think they have the right to all of your personal, financial information? Why don't privacy rights apply here, as well?

    In the US, y'all have the right to be "secure in your papers" unless the government gets a warrant. Yet, your government knows everything about your financial life: your salary, your bank balance, your investments - apparently all of that is reported automatically. What happened to the "secure in your papers" bit?

    For what it's worth, this intrusiveness is neither necessary nor justified. I'm in Switzerland, and the government here does not have the right to all of your financial info. Yet, the Swiss government still manages to collect taxes. If they think you're cheating, they can go after you - but this involves a court process, warrants, and the usual procedures that a government must take, if they want to collect evidence against a private person.

    • Re: (Score:1)

      by Anonymous Coward

      Bullshit. *I* live in Switzerland, and have to list cryptocurrencies holdings every year in my Steuererklärung: https://www.zh.ch/de/steuern-f... [www.zh.ch].

      A wallet is no different than, say, a bank account in that regard.

      • Sure, you have to list them. You also have to list your income. However, the government doesn't automatically know about them. What other countries have is different: the financial providers tell the government directly about every little detail of your financial life. That's a completely different - and much more intrusive - situation.
        • Because people can never be trusted, they go out of their way to not pay their fare share now. Watch your tax base shrink to near zero if self reporting was a thing.

    • Yet, your government knows everything about your financial life: your salary, your bank balance, your investments - apparently all of that is reported automatically.

      Who says you have to take a job with a regular salary? Start a cash business. Who says you need FDIC insurance on your assets? Keep cash under your mattress. Who says you need to invest in other companies on the open/regulated market? Invest cash in your own business.

      Of course it's way more convenient, safe, and reliable to run your finances the way you described compared to the way I described. That's because of regulations (privacy invasions).

      What happened to the "secure in your papers" bit?

      You *are* secure in your papers as long as you don't expect

  • Yes, please regulate the anynymous paper wallets and passphrases. Educate THEN legislate

    • Re: (Score:2)

      by gweihir ( 88907 )

      If you could read, you would know this is about crypto exchanges, not private vallets.

  • How do they intend to verify the transfers in XMR or ZEC? AFAIK those two (among others) were designed to prevent such sort of tracking. So crypto exchange -> paper wallet -> crypto exchange should still be untraceable even with exchange in full compliance of the law.

    • Re: (Score:2)

      by gweihir ( 88907 )

      How do they intend to verify the transfers in XMR or ZEC? AFAIK those two (among others) were designed to prevent such sort of tracking. So crypto exchange -> paper wallet -> crypto exchange should still be untraceable even with exchange in full compliance of the law.

      It is very simple: Either a) a crypto exchange can provide full records or b) it cannot. b) results in steep fines and possible prison time for exchange personnel.
      Hence very likely no exchange can process XMR or ZEC anymore. Users can still exchange directly but that is it.

      • Re: (Score:2)

        by DarkOx ( 621550 )

        I am not going to pretend to know how things like this work in the EU. However in the US I suspect it would be handled just like a large cash deposit is handled. You'll be asked to sign a statement identifying its source. It will be reported to various parties - for the US that would be the Fed over 3k and the IRS if its over a 15k.

        Can you lie? Of course you can, but now they have you on some form of perjury/forgery/uttering/or some other false statements law. So I am sure you can get away with under repor

        • Re: (Score:2)

          by gweihir ( 88907 )

          Unlikely. It is not a cash transfer where a person has to show up in person. It is an electronic transfer and they have other rules. Also just wait until somebody in the US claims "cryptocurrencies are used to finance terrorism" and see what happens. The onus is on the side of the exchange though.

          • Re: (Score:2)

            by DarkOx ( 621550 )

            So the will do what everyone in finance is doing for contracts and legal disclosures now; they will use something like docusign or if you can't/won't they'll have you fax over signed form..

            At least in the US electronic transfers have *mostly* that same rules. If it seems like they don't its because underneath what ever the consumer service offering happens to be its ACH or a Wire and the FED has complete visibility anyway.

            Cryoto currency might be designed in part to facilitate remote money transfers but it

    • You're presuming exchanges would keep dealing in Monero or ZCash. If they cannot do it legally any longer, they simply won't.

      • That would have to happen worldwide. Otherwise you could simply exchange Monero for Bitcoin somewhere outside the EU's jurisdiction.

        • And then you'd still need to exchange it back to a EU-friendly crypto wallet in order to actually use it.

          Make no mistake, if the EU forces half the world's exchanges to drop Monero/ZCash, those would be effectively dead.

  • I agree that it's only a project that may not even come to the realization, and it was made to stop money laundering and the financing of terrorism. It's a good purpose, but it would make many honest people stop trading cryptocurrency too. I use BitQS [bitqs.org] just like many other investors, but it's debatable if people will continue using any auto-trading applications in general.
  • I am looking for some pages about crypto that I may have to make a list of which pages are reliable at the moment I have this website [dailyforexjournal.com], someone else can recommend more pages, about information, current value or even exchange pages, I would be very grateful with this information, I am thinking of doing a new business.

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