A proposed European law sows concern in the world of cryptocurrencies


Satoshi Nakamato’s project was based on the idea of ​​anonymity. The mysterious creator under the pseudonym of Bitcoin, wanted to allow everyone to exchange currency without intermediaries. On his network, “the public can see that someone sends an amount to another person, but without information linking this transaction to anyone”, he wrote in his 2008 profession of faith. Anyone can observe the accounts and their activity, so it is more about “pseudonymity” than “anonymity”. Holders hide behind a nickname (their account number), but it is impossible to know their identity if they do not reveal it. This is indeed the concern that concerns the European Union.

The possibility of revealing an identity

The Committee on Economic and Monetary Affairs is thus working on a new regulation which should make it possible to see more clearly. Thursday, March 31, it will meet to vote on the text and its amendments. But this is not without arousing a wave of panic among professionals and several holders who see it as a desire to question the very spirit of cryptocurrencies. What bothers them in particular is the ability (1) offered to centralized platforms to request the identity of the beneficiary or sender of a transfer even for a “non-hosted wallet”.

Cryptocurrency holders can indeed store their tokens either on a platform, with a “hosted wallet”, or themselves on a “non-hosted wallet” (technically, the wallet is always hosted somewhere, but let’s move on). In the latter case, it is more commonly said that the individual has his own private key. If the platforms today have integrated know-your-customer procedures, they are not necessary and cannot be imposed on “non-hosted portfolios”.

On the other hand, companies that manage “hosted wallets” may be forced to request information during transfers. This is the European project which also wants the platforms to oppose the operation when the data seems inaccurate, or even to transmit them to the authorities or keep them at their disposal. In summary, if a “non-hosted wallet” makes a one-time transfer with a “hosted wallet” and reveals their true identity, then that might be enough for the authorities to find out.

Twitter ignites

“Like bank transfers, transfers of crypto like Bitcoin should be accompanied by information about the person sending or receiving the funds.justifies MEP Paul Tang. So the identity of a non-hosted wallet holder requires verification, just like when you identify yourself at the bank for a deposit. »

He reacted vigorously to a message from the professional Patrick Hansen who spotted the information and wished ” sound the alarm “ on Twitter.

Other industry representatives have followed suit, such as Brian Armstrong, CEO of the major American platform Coinbase : “It is important that we continue to push back against bad crypto policy proposals. »

Also protested by the figures of the KPMG cabinet, Alexandre Stachchenko and Claire Balva:

There is no doubt that Thursday’s vote will be followed closely. A few weeks ago, an amendment to the MiCA (Market in Crypto Assets) regulation, which planned to ban mining for certain blockchains including Bitcoin and Ethereum, was rejected after strong pressure from professionals.

(1) Draft report on the proposal for a regulation of the European Parliament and of the Council on information accompanying transfers of funds and certain crypto-assets, see in particular amendments 68 on article 18a, 15 on article 27 ter and 52 on Article 14.






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