Controversial EU Cryptocurrency Law Unsettles Crypto Community

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  • The EU Parliament has just passed a proposal that many in the cryptocurrency industry are concerned about.
  • The proposal involves crypto service providers collecting personal details from unhosted wallets.
  • Prominent names in the cryptocurrency industry are calling the new rule a breach of privacy.

On March 31, the European Union (EU) parliament voted in favor of rules that targeted non-custodial or unhosted wallets. The Committee on Economic and Monetary Affairs alongside The Committee on Civil Liberties, Justice, and Home Affairs agreed on anti-money laundering requirements for the cryptocurrency space.

The new rules require cryptocurrency service providers to collect personal details of anyone who transacts over €1,000 of cryptocurrency using unhosted wallets. Otherwise, a transaction wouldn’t be allowed. The legislators aimed to ensure traceability of these transfers to identify possible suspicious transactions.

In detail, unhosted wallets are addresses controlled by individuals rather than crypto exchanges. It is a term used by the Financial Action Task Force and Financial Crimes Enforcement Network.

Two members of the European Parliament showcased their stances on the matter via Twitter. Markus Feber shared that the ban would be unnecessary and disproportionate. On the other hand, Paul Tang says the rule isn’t a ban but rather a verification process.

Meanwhile, Bitfinex CTO Paolo Ardoino expressed his disappointment that the proposal had passed. In a thread of tweets, Ardoino said that the law wasn’t for consumer protection but rather a step back for human rights.

Similarly, Coinbase Chief Executive Officer and Co-Founder Brian Armstrong, in a thread of tweets, spoke of how the rule was “anti-innovation, anti-privacy, and anti-law enforcement” before urging people to contact members of the parliament.

One of the most prominent voices of this issue comes from Unstoppable DeFi’s Head of Strategy and Business Development Patrick Hansen. Hansen has made extensive threads regarding the issues of this new law.