EU Parliament passes proposals to hinder cryptocurrency privacy

EU flags outside the EU headquarters.
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European Union (EU) lawmakers have supported controversial proposals to outlaw anonymous crypto transactions.

More than 90 lawmakers from the EU Committees on Economic and Monetary Affairs (ECON) and on Civil Liberties, Justice and Home Affairs (LIBE) voted in favour of the measures.

The new rules would extend anti-money laundering requirements that apply to conventional fiat payments over EUR 1,000 to the European crypto sector.

However, they would also remove this price floor for crypto, meaning that transactions of any size would require payer and recipient identification. This would even extend to unhosted and self-hosted wallets.

Beyond dismantling one of the fundamental tenants of crypto payment systems – privacy – further measures are under discussion to cut off unregulated exchanges from the traditional finance system.

The proposals will proceed to the trialogue stage, where they will be debated by the EU parliament, Commission, and Council.

Some members of the centre-right leaning European People’s Party opposed a number of the more controversial proposals, describing them as a “de facto ban on self-hosted wallets”.

Joining them, unsurprisingly, were a number of big names in the crypto industry. Brian Armstrong, CEO of Coinbase, criticised the decision as anti-innovation and anti-privacy. He went on to say it would lead to a “new crypto surveillance regime” in Europe.

“Any time you receive 1,000 euros or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity,” Armstrong tweeted, pointing out that the rules treat crypto users more harshly than fiat users.

Before the proposals can pass into law, they must be agreed upon by both the parliament and national ministers, who meet at the EU Council.

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