Europe agrees to end the anonymity of cryptocurrencies

Europe agrees to end the anonymity of cryptocurrencies

The European Union has taken another step in its intention to put an end to money laundering with cryptocurrencies. Both the European Parliament and the Council have reached an agreement which aims to force the providers of these assets to provide the necessary information on the transactions in order to, in addition to laundering, prevent the movements from being completely anonymous and, therefore, untraceable by the authorities.

With the so-called Transfer of Funds Regulation (TFR), which still needs to go through different processes before being definitively applied, cryptocurrency providers will have to collect and, if necessary, provide to the authorities, both the information of the beneficiary of the transaction, and the person of origin.

All this, in addition, regardless of the amount that is sent. According to the EU, because the “speed and virtual nature” of these movements “easily circumvent existing rules based on transaction thresholds.”

This measure also applies to those known as unhosted wallets; cryptocurrency wallets that are not linked to any provider. In this case, with the movements of those transactions that exceed more than 1,000 euros. The objective, in any case, is to stop different suspicious movements. Among them, they could give rise to money laundering or even the financing of terrorism.

Cryptocurrency providers, against the new EU measures

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The new regulation that the EU is preparing, despite the fact that it may be correct to avoid suspicious and illegal movements, has not pleased the crypto asset service providers (CASP). According to Bloombergmore than 40 companies dedicated to offering cryptocurrency hosting and transaction platforms, including coinbasehave sent a letter to the EU economy ministers to reflect their disagreement.

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The main reason is that the new measure that seeks to oblige suppliers to report on transactions, it goes against one of the basic principles of cryptocurrencies: decentralization. This, basically, consists of hiding the information of the users who make a movement. In this way, your data is not distributed to any third party and the designs of these are, therefore, the users themselves.

They also fear that these obligations may pose a risk to the privacy of their customers. The EU, however, hguaranteed data protection once the project enters into force.