Topic: Goodbye, privacy, goodbye, it was nice while it lasted. - page 7. (Read 2250 times)

I don’t think that this would affect those that are living outside the EU. But The thing is that other countries might as well decide to adopt the same strategy, we are just not sure about that yet. All this while the government were just taking their time to study cryptocurrency and how it works and then know the perfect way to come for it. And this is what they have just started to do now.

From what I’ve understood, and to answer your question, how this is going to work is that if you are sending Bitcoin from your decentralized wallet to an exchange that is centralized, I believe that it would be accepted by the exchange.

And then if you decide to send Bitcoin from your centralized exchange to a decentralized wallet like you have said, the exchange would require you to give information about who is receiving the Bitcoin that you are sending out. So, you are giving information about yourself and about the recipient for whatever transaction you are making. That is how it’s going to work.

I don't think this law will have much influence at the stability of Bitcoin price. It will be traded as it is traded now, the only difference is that the traders will have to do KYC if they live in the EU. And as we can see now, it seems as though majority of traders doesn't mind going trough KYC procedure.

This is worse than many people think.

There will be blacklist of "non-compliant" entities. So moving company outside of EU won't work.
If actors like coinbase,kraken and binance want to keep their SEPA FIAT EUR gateways, they'll have to comply.

This is an attempt to convert cryptocurrency system into Banking like system where every party of the transfer is known.
If that goes through and gets implemented, it's pretty much the end of crypto and many fundamentals it's based on such as 'not-my-keys-not-my-coins'

At this moment there's no such regulation in draft but i can imagine that the next regulation -  after 12 month review, will be prohibiton to exchanges in EU from accepting any kind of transfers from unhosted wallets.
If you don't comply and you use unhosted wallet, you'll be kicked out of system and you'll never be able to cash out these funds in EU.

You'll have bank-like-account with your crypto and you'll only use that to send money to exchanges.

It was nice while it lasted, good that we got couple of more years to cash out.
I'm also sure that this draft violates many rights and could be fully overthrown in upper EU courts. But this is gonna take years and before that happens crypto is gonna be done.


But i will also tell you one thing, EU crypto firms owners are aware how shitty these regulations are and what is going to be their impact on the market and their businesses
When new AML directive about source of funds was implemented in EU Near 2018, the Bitstamp was sold
All EU exchanges are on heavy decline regarding volume and amount of customers since 2018.



It's worth noting that most crypto companies did absolutely nothing to prevent this from happening except of sending few emails, couple of days ahead of vote.  


It will remove liquidity from the market, the compliance processes will extend and onboarding of new customers will take much longer. There'll be less money coming into the space.
As said above, this is attack on crypto fundamentals. At this moment crypto value is based primarly on speculation and most who get into the space are coming here for speculative gains, when you remove more and more fundamentals.. it's not gonna be good.
After implementing something like one can expect  heavy price decline over time, however many are not yet aware how serious these changes are.
This might be related to fact that many of big players on the market are present on offshore exchanges.



Literally every big crypto exchange should spend significant amount of funds on lobbying to avoid this being implemented. Long term it's disaster.

The network will keep chugging along, and do what it does for the last 10 years, without rest, without downtime, producing block after block, issuing coin after coin for Mr. Heroine dealer in the dark market. By design, Bitcoin was built to be a work around against censorship. It's up to you, the user, if you want to continue to use it, or not just because someone pounded a gavel.

This is very unfortunate since such regulations go against the vision of Satoshi, which is to create a freedom of transactions without any government/third-party intervention in our finances. Though this may be the first step in creating the law, I hope that the bill somehow limits the power of the government to meddle with the transactions in our exchanges, etc.

Assuming that the law/s will be enacted, will there be a big impact of cryptocurrencies in their price? Will we see BTC becoming something that is stable on its price, removing its volatility and inflationary nature?

Are you talking about those requirements franky1 was talking about?

I've already shown that he was talking about a draft that didn't pass. Not the one that is the subject of this thread.


?

Precisely this draft aims to do just that.  o_e_l_e_o has explained it well, and you gave him merits for that.

Let's see how he says it in another post:


The only thing that would be exempted would be transactions between two individuals but what this draft wants is something like if someone buys something in a supermarket for $1, paying in cash, they would be obliged to ask the customer for an ID to report to the IRS. This draft wants to do that for Bitcoin, which would seem absurd with cash.


Exactly, this is what this is about.

About the Minimum capital requirements.

From what I can see it's in line with a lot of the requirements there in the US and NY.

And it's actually significantly lower then for some states, like Texas just to have a BATM or do any kind of crypto <-> fiat business that can easily hit $1million requiremets. So I don't see that as a big deal.

The rest of the privacy stuff is just plain nuts.

-Dave

This was bound to happen eventually on the EU level as Estonia (who used to be one of the most "pro" crypto countries) started implementing the same ( or similar) law several months ago. We all knew that governments will want their piece if cake once crypto reaches certain level of adoption, and it's happening as we speak.


I surely hope so, but I am not so optimistic as people tend to be conformists. Once you get out of bitcointalk, you soon realize how majority of crypto users don't care much about privacy, security, decentralization and all that being your bank thing.


You want to say that Democratic People's Republic of Korea (better known as North Korea) is not democratic at all?

This is getting interesting.  AML, KYC and now Know Your Transaction?  Next up.  KEYC, also known as Know Everything You Can.  And people will accept it.  And they will be happy with it.

So what I understand is, this will apply to third parties.  To practically all transactions in which a third party is involved.  I can not see how they would ever be able to enforce Know Your Customer or Know Your Transaction on every single kind of wallet because then you would need to enforce all developers and GitHub to create a specific Bitcoin Core and Electrum just for Europeans whilst hiding the other versions from them.  And we know how well this would go too.  As well as getting GApps off Huawei phones did.

They can not ban Bitcoin's privacy features.  By banning them, they would immediately turn almost a trillion USD into underground money.  And I am certain many of us would NOT stop using Bitcoin due to a law.  In fact.  It could make us even more determined to choose Peer to Peer over centralized.  To use Bitcoin Core and Electrum over Binance.  And much more.

To me, it is still not FUD.  Do whatever with those centralized third parties.  I always tried avoiding them anyway and I expected the world was going to get more authoritarian over the years so I am not surprised.    What I am kind of surprised to see is how many humans are taking the bait.  Illicit activity is the reason they will take away each and every one of your rights.  For the better of humanity, for less crime they will continue to say.  Yet there is zero sign of criminal activity slowing down the more authoritarian they are.

-
Regards,
PrivacyG

Both of your comparisons here are very weird and more like comparing apples and oranges.

CBDC is and will always be 100% centralized and you can't and will never be able to have any kind of privacy using it. In a sense it is no different than using banks as you already do. The bill on the other hand is targeting centralized services which doesn't affect bitcoin or "all aspects of people's financial activity".
Bitcoin on the other hand will always be decentralized and nobody can control it or your transactions. All they can do is to control big centralized places like a payment processor that shouldn't even exist in bitcoin ecosystem, or exchanges and such. But for example they can never force a supermarket that accepts bitcoin to ask for KYC when someone pays for a bag of chips.

And don't get me started on the fake democracy that never existed to begin with. Let me just say that those that claim they have democracy the most, don't have it at all

I think that P2P trading will boom after this law passes. And I have nothing against P2P trading. It is much easier to sell crypto on some exchange, but those who value their privacy must give up on some commotion in order to preserve that privacy.

That's one way to go around it, but I think they already have it figured out right before anyone even thought about it. Most probably they have diffent measures in place to make sure that the system will not be gamed and cheated by people, though for sure loopholes will soon be found by people to nullify what the EU is trying to do.

P2P is the way to go, always has been, and regulations and laws like this will force people to go back to crypto's roots.

This is bad news for the crypto world and it will mean they will likely use centralized exchanges to monitor what goes on in the non custodian wallets for every coin moved to and fro their exchanges. The way out is to defend against this privacy threat. I don't think it's nice to bid this awesome privacy offer by bitcoin goodbye already there must always be a way around to maintain what has been built upon this is where the relevance of the bitcointalk community needs to be proven even in the face of the big threat

If this bill is passed its worse than CBDC itself. They will be poking in people everyday life and will apply control on all aspects of financial activity. Its an ultimate totalitarian financial dictatorship! EU is no different than China now! RIP freedom and democracy!

especially in the last months, there were many thoughts, speeches, and votes against the economic freedom of bitcoin they just say they want to provide people safe transaction and do not let the fouds abuse the freedom of economy provided by bitcoin, there are also many other reasons such as clearance of the transaction and stop letting bitcoin becoming a world currency to have a new competitor for euro and dollar, these are all normal because by raising a system like bitcoin and other cryptocurrencies the other old and traditional systems should fight with it and do not let it rise.

Here is the most important part:


So any and all transfers which involve a "crypto-asset service provider" require full KYC and reporting to the authorities. So what's a "crypto-asset service provider"? See below:


So this involves every custodial wallet, every exchange, every swap service, every payment processor, every casino or sportsbook, basically every crypto service in question. If you so much as touch a third party, then they will be obligated to collect your information and pass it on to your government. The only thing that will remain private is direct transactions between individuals. If a merchant accepts bitcoin directly then (at least for the time being) they can avoid this, but if they use a payment processor then they will be collecting KYC as well as information on the source of your funds for all transactions.

I request to the moderators not to merge this post with the previous one, by its lenght to make things clear. These are obviously not shitposts and I do not do it to get paid more because this week I exceed my posting requirements.

After reading the long draft, I was thinking that I didn't remember reading in the draft what franky1 had posted. I took him off ignore, looked up what he had posted, without citing the source, and I see that it is not in this draft.

After investigating, I see that he is quoting a previous draft that was not approved.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593

The draft he cites is this one, which is not the one that was voted on last Thursday, nor the one I am referring to or referred to in the articles cited in the OP.

There is a thread on the forum about this previous draft.

EU Lawmakers Drop Bitcoin 'Ban' From Draft of Crypto Regulations

Well, today I had more time to read the long draft, and I see that indeed as I said and was said in the articles I quoted in the OP, the draft poses a threat to privacy. I was going to quote excerpts throughout the text but I think it's going to be more useful to just quote the final proposals, putting in bold what I think is most relevant:

Source: https://www.europarl.europa.eu/doceo/document/CJ12-PR-704888_EN.pdf

The draft report puts forward the following key proposals.

1. No exemptions based on the value of the transfer

With respect to wire transfers, the Transfer of Funds Regulation requires a payment service provider to ensure that transfers of funds are accompanied by complete information on the originator and the beneficiary and to verify the information on their customer only if the transfers of funds exceeds EUR 1000, individually or as part of small linked transfers which together would exceed EUR 1000, except where the funds to be transferred are received in cash or anonymous electronic money or there are reasonable grounds for suspecting money laundering or terrorist financing.

Due to the specific characteristics and risk profile of crypto-assets, the information obligation should apply to crypto-assets transfers, regardless of the value of the transfer. There are clear indications that crypto-asset activities associated with criminal activities and terrorism financing are often transfers of small value. Furthermore, crypto-assets and related technologies enable criminals to split high value transfers into small amounts across multiple wallet addresses in order to avoid detection of AML/CFT monitoring systems and to carry out illicit activities via structured transactions to a scale and global reach not available to wire transfers.

In the view of the co-rapporteurs, the removal of a de minimis threshold for crypto-asset transfers would facilitate, rather than complicate, compliance and risk management by crypto- asset service providers. This is particularly relevant in light of the difficulty to identify linked transfers executed via multiple apparently unrelated wallet addresses as well as the high volatility of the valuation of most crypto-assets.

2. Transfers from/to un-hosted wallets

Secondly, it should be clarified that this Regulation applies also to transfers from or to crypto-asset wallets based on a software or hardware not hosted by a third party, known as ‘unhosted wallets’, provided that a crypto-asset service provider or another obliged entity is involved. In such circumstances, however, there should be no transmission of information to the unhosted wallet. Information should be obtained by the crypto-asset service provider directly from its customer and should be held and made available to competent authorities.

3. Know your transaction

In addition to obtaining accurate information on the originator and the beneficiary, crypto-asset service providers should also be expected to obtain information on the source and destination of crypto-assets involved in a transfer. In particular crypto-asset service providers should establish effective procedures to detect suspicious crypto-assets, in particular any link with illegal activities, including fraud, extortion, ransomware or darknet marketplaces, or whether the crypto-asset has passed through mixers or tumblers or other anonymizing services. This is especially important when dealing with transfers involving unhosted wallets or non-EU crypto- asset service providers not complying with the same travel rule obligations.

4. Counterparty due diligence and protection of personal information

Crypto-asset service providers are expected to transmit required information also to crypto- asset service providers established outside the Union. However, before transmitting such information, crypto-asset service providers should identify their counterparty and assess whether they can reasonably be expected to comply with the travel rule and protect the confidentiality of personal information. Crypto-asset service providers should avoid interacting with illicit or untrustworthy actors.

5. Public register of noncompliant crypto-asset service providers

In order to facilitate the identification of illicit actors that pose a great risk from a AML/CFT perspective, the European Banking Authority (EBA) should maintain a public register of noncompliant crypto-asset service providers, consisting of entities which cannot be linked to any recognised jurisdictions, do not apply any identification measures on their customer and offer anonymising services, given their role in undermining the effectiveness of AML/CFT systems and controls.

6. Fast track

Finally, in order to speed up its adoption and ensure that crypto-asset service providers and other obliged entities put in place effective mechanisms to comply with the travel rule for combatting money laundering and terrorism financing, the current recast proposal should be decoupled from the rest of the new AML package and should be linked to the existing AMLD framework until the entry into force of the new regime, while preserving the alignment with the upcoming Regulation on Markets in Crypto-assets [MiCA].

The co-rapporteurs are convinced that an effective and strengthened framework to prevent the misuse of crypto-assets for money laundering and terrorist financing purposes is necessary to protect EU citizens from terrorism and organised crime, while contributing to the development
of a safe, lawful and well-functioning space for users of crypto assets and crypto asset service providers across the Union. The co-rapporteurs call on Member States and EU competent authorities to ensure proper implementation and enforcement also in a view of avoiding unfair
and unregulated competition, including from non-EU players.

Finally, the co-rapporteurs emphasize the role the Union should play in promoting the implementation of the travel rule for crypto-asset transfers at global level as well as effective international cooperation to combat money laundering and terrorist financing.

There are other interesting things in the text, for example it also talks about ATMs:

"Providers of kiosks or automated machines connected to a distributed ledger network, also known as crypto- asset automated teller machines (‘crypto- ATMs’) enable users to perform transfers of crypto-assets to a crypto-asset address, by depositing cash, often without any form of customer identification and verification. Crypto-ATMs are particularly exposed to money laundering risks because the anonymity provided and the possibility of operating with cash of unknown origin, makes them an ideal vehicle for illicit activities. Given their role in providing or actively facilitating transfers of crypto-assets, transfers of crypto-assets linked to crypto-ATMs should fall under the scope of this regulation."

This seems to me to be along the lines of what has happened recently in the UK:

Bitcoin ATMs forced to shutdown in the UK

So I reaffirm what I said in the OP, this draft is a clear threat to privacy.

I think it's too early to worry much about it. It's important to stay informed and watch the new legislation coming into play. It could definitely be very damaging for the crypto community in Europe and limit our abilities to send crypto money freely. But they EU voted a few days ago on an outright ban of cryptos, which luckily didn't get a majority. So if politicians can be persuaded against any crypto ban in the future with tighter regulation than so be it. Who knows if this will get through all the national governments without any amendments. At the moment they propose the limit to report is at 1,000 EUR. Anybody who wants to fly below the radar has just to do many 999€ transactions. But maybe the limit will be raised before it becomes law. For cash the limit is at 10,000€ to be reported. Also there could be some loopholes for us in the future. Best to wait and observe.

At the end of it all, this can only be very effective in countries with high security standard, advanced countries with high data source of all citizens, in developing countries i don't think this will be very effective. someone can easily attached a fake name with the wallet and am not sure if they can be able to identify that the name is fake. It seems crypto adoption just taking different turn, new laws every now and then that is not so good with crypto and what it stands for.