Coinbase has called for the crypto community to make their voices heard against an upcoming EU vote on an amendment to the Transfer of Funds Regulation, which would affect crypto. COINBASE says that the change would result in privacy violations.
San Francisco-based exchange Coinbase is making a call to arms with respect to the upcoming European Union vote on an amendment to the Transfer of Funds Regulation. The exchange has asked the public to oppose the law, which could,
“unleash an entire surveillance regime on exchanges like Coinbase, stifle innovation, and undermine the self-hosted wallets that individuals use to securely protect their digital assets.”
Coinbase points out the issues with the law, saying that it could have a deep and wide-reaching impact on the market. It states some incorrect facts posited during the discussion of the law, including the belief that bitcoin, ethereum, and other assets are a primary way to launder money. Other bad facts that Coinbase points out include law enforcement being unable to track those movements, and that,
“requiring collection and verification of personal information associated with self-hosted is not a violation of their privacy.”
Coinbase asserts that digital assets are an inferior way to launder money, linking research suggesting the same. A common argument that crypto proponents use is the fact that cash remains the most effective way for criminals to hide their illicit activity.
It goes on to say that, if the amendment was made, it would result in a new level of privacy invasion. It would treat crypto as travel rule eligible, and differently from fiat. But it states that the most egregious of changes would be new obligations on exchanges to collect, verify and report information on non-customers using self-hosted wallets.
Second, for transactions with self-hosted wallets, requiring the widespread collection, record holding, and verification of data is hugely harmful. The verification requirement, in particular, is almost impossible to satisfy, raises serious privacy issues & should be fixed
— Faryar Shirzad (@faryarshirzad) March 27, 2022
As a result, it calls for the crypto community to oppose the draft proposal. The vote is set to take place sometime this week and could be the first of many as the EU has talked about different risks in the crypto market. The authority just rejected a proof-of-work ban, but it’s clear that it’s not done yet when it comes to crypto regulation.
Crypto insiders also worried about law
Several crypto insiders have expressed their concern about the law, for the same reasons that Coinbase stated. Unstoppable Finance Head of Strategy and Business Development Patrick Hansen posted a lengthy Twitter thread about the change and pointed out some red flags.
1/ I hate to ring the alarm bell again, but the EU Parliament leaves us no choice ????
This time it concerns a crackdown on unhosted wallets in the upcoming crypto AML regulation (TFR).
The ECON committee vote is on Thursday and the draft includes some absolute red flags ??
— Patrick Hansen (@paddi_hansen) March 26, 2022
The biggest concern for him is the requirement for crypto service providers to share the personal information of clients. The massive change would be the necessity of verifying collected information. As he rightly points out, the law change does not state how crypto service providers can go about doing this.
Hansen believes that this will result in crypto companies being unable or unwilling to transact with unhosted wallets. And like Coinbase, he believes that there are a host of privacy violations with the change.
