EU lawmakers sign restrictive crypto laws, disregarding protests.

Lawmakers across the European Union voted in favor of a controversial decision to prohibit anonymous cryptocurrency transactions. The aforesaid legislation came as a  surprise to the growing global crypto community. Experts suggest that outlawing anonymity in crypto transactions will be a setback to crypto innovation and lead to an invasion of privacy.

EU Legislators Favor Stripping Away Crypto’s Privacy Features

Over 90 legislators and lawmakers voted in favor of abolishing the privacy features of cryptocurrencies. The law states anti-money laundering(AML) mandates are applicable for fiat payment amounts exceeding 1000 Euros to the crypto sector. It also removes one of crypto’s key features- anonymity. Exchanges all across Europe are now required to track crypto transactions even of the smallest units including unhosted and self-hosted wallets. Additional measures feature a cut-off for non-regulated crypto exchanges from the traditional finance system. 

Also Read: The Right Balance of Public and Private Cryptocurrencies

New Crypto Law Rocks the Worldwide Crypto Industries

Several European national governments had declared their intention to scrap the crypto threshold limit of 1000 Euros in December earlier year. The primary reason supporting their argument was the fact that it is actually easy to bypass the aforementioned limit through digital payment systems. Also, it is not difficult to include private wallets from non-regulated crypto service providers in digital transactions.  

Also Read: Government Of USA Passed A Bipartisan Bill To Modify A Provision In Infrastructure Law Dealing With Crypto Tax

Additional Legal Proposal

There was additional discussion on a separate legislative proposal supporting the prevention of payment transfers on non-compliant digital asset service providers, particularly those operating within the European Union without authorization, affiliation, or attachment to any jurisdiction. 

Opposition from Multiple Sides

The European People’s Party, a central right party, opposed additional suggestions that were deemed even more controversial. They argued that these laws would equate to a “de facto ban on self-hosted wallets” if implemented. 

In regards to the new laws, the economic spokesperson for EPP, Markus Feber, made the following statement yesterday: 

“Such proposals are neither warranted nor proportionate. With this approach of regulating new technologies, the European Union will fall further behind other, more open-minded jurisdictions.”

The newly signed law saw widespread protest and opposition from major participants in the global crypto industry. Legal experts are also apprehensive about the law explaining that tyrannical laws violating the privacy of a person may backfire big-time when challenged across EU courts.  

Wrapping Up

The proposition requires agreement from both parliament and national ministers to be passed into law. Heavy-handedness from the side of European lawmakers seems to be unjustified. Most digital assets are easily traceable and are actually poor options for criminals to conduct money laundering or other illicit activities. The impact was visible on Bitcoin valuations, which dropped 2% within minutes of the vote from USD 47,500 to USD 46,400.