European Union Parliament Passes Bill Amidst Industry Criticism

Today, the European Union Lawmakers voted in support of the contentious measure to make anonymous crypto transactions illegal.  A move the sector has criticized as stifling innovation and invading privacy.
European Union Parliament Passes Bill Amidst Industry Criticism
EU Parliament Passes Bill Amidst Industry Criticism

According to report, more than 90 lawmakers voted in favor of the idea. The plans aim to expand anti-money laundering (AML) laws to the crypto sector, which now apply to traditional payments exceeding EUR 1,000 ($1,114).

They also raise the bar for crypto payments, requiring the identification of payers and recipients of even the tiniest crypto transactions, including those involving unhosted or self-hosted wallets. Unregulated crypto exchanges could be cut off from the traditional banking system if more measures are considered.

National governments announced in December that they planned to eliminate the EUR 1,000 cryptocurrency threshold, citing the ease with which digital payments can circumvent it, as well as include private wallets not run by regulated crypto asset providers.

Many of the more contentious amendments were rejected by members of the center-right European People’s Party (EPP), who denounced what they called a “de facto ban of self-hosted wallets.”

In an emailed statement on Thursday, EPP economic spokesperson Markus Ferber stated, “Such suggestions are neither warranted nor proportionate.“With this approach of regulating new technologies, the European Union will fall further behind other, more open-minded jurisdictions.”

A separate legal proposal presented today would prohibit transfers to “non-compliant” crypto service providers, such as those operating in the EU without authorization or those not linked with or based in any state.

Despite opposition from significant sector actors such as Coinbase and legal experts who cautioned that unduly harsh privacy violations could face legal challenges in EU courts, the decision was passed on Thursday.

According to the new legislation, Coinbase would have to disclose to the authorities any time a customer acquired more than EUR 1,000 in crypto via a self-hosted wallet, according to the exchange’s CEO Brian Armstrong.

In order to pass into law, both the parliament and national ministers, who meet as the EU Council, must agree on the plans.
As the vote came through, Bitcoin’s price decreased around 2% in minutes, from $47,500 to $46,400.