European Commission Targets Crypto Wallets And Citizens' Privacy

The European Commission (EC) announced "an ambitious package" of legislative proposals that would decrease the privacy of the EU citizens if implemented.

"Today's measures greatly enhance the existing EU framework by taking into account new and emerging challenges linked to technological innovation. These include virtual currencies, more integrated financial flows in the Single Market and the global nature of terrorist organizations," the EC said.

According to them, these proposals will help to create a "much more consistent framework to ease compliance for operators subject to AML/CFT [anti-money laundering/combating the financing of terrorism] rules, especially for those active cross-border."

Key, crypto-related points from the proposals:

• The proposed reform will extend EU AML/CFT rules to the entire crypto sector.
• All service providers would be obliged to conduct due diligence on their customers.
• The amendments "will ensure full traceability of crypto-asset transfers, such as Bitcoin."
• Anonymous crypto asset wallets will be prohibited.

The legislative package will now be discussed by the European Parliament and Council. Also, the EC hopes that the new EU-level Anti-Money Laundering Authority (AMLA) should be operational in 2024. But it would start its work of direct supervision "slightly later, once the Directive has been transposed and the new regulatory framework starts to apply." AMLA would be the central authority coordinating national authorities "to ensure the private sector correctly and consistently applies EU rules."

"Money laundering poses aclear and present threat to citizens, democratic institutions, and the financial system. The scale of the problem cannot be underestimated and the loopholes that criminals can exploit need to be closed," Mairead McGuinness, Commissioner responsible for financial services, financial stability and Capital Markets Union, was quoted as saying in the announcement.

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Reactions:

absurd. unenforceable.

— Neeraj K. Agrawal (@NeerajKA) July 20, 2021