European Union legislators have recently voted in support of contentious rules to prohibit anonymous cryptocurrency transactions. This move incited much criticism from the crypto industry that these regulations would impede innovation and infringe on personal privacy.
According to records obtained by CoinCulture, more than 90 lawmakers voted in support of the proposed rules.
The new regulations aim to extend anti-money laundering (AML) measures already applied to conventional transfers over EUR 1,000 (AU$1,478) to the crypto industry. Besides, they eliminate the floor for cryptocurrency payments, requiring payers and receivers of even the tiniest crypto transactions to be identified, even those using non-custodial or self-hosted wallets. Additional restrictions under consideration might lead to the removal of unregulated cryptocurrency exchanges from the mainstream banking system.
In December, national governments stated that they intended to eliminate the EUR 1,000 barrier for cryptocurrency, given that digital payments may easily surpass the restriction and include private wallets not maintained by licensed crypto asset providers.
Members of the centre-right European People’s Party (EPP) spoke out against most of these contentious rules, calling them a “de facto ban of self-hosted wallets.”
In an emailed statement on Thursday, EPP economic spokesman Markus Ferber opined that the proposed regulations are neither justified nor reasonable. With this regulatory approach to emerging technology, the European Union will be farther behind more receptive and open-minded governments.
Another legislative proposal being debated would prohibit transfers to “non-compliant” cryptocurrency service providers, including those operating in the EU without authorisation or those not linked with or formed in any nation.
The vote on Thursday took place in the face of harsh opposition from prominent industry players and legal experts who warned that too strict privacy enforcement might face legal challenges in EU courts.
Under the new legislation, crypto exchanges would be required to notify authorities if a client acquired more than EUR 1,000 in cryptocurrency via a self-hosted wallet. However, the proposals are only enacted when unanimously approved by parliament and national ministers who constitute the EU Council.
Bitcoin’s price fell nearly 2% in minutes after the vote, from $47,500 to $46,400.
