An unofficial draft by the EU Commission apparently wants to ban the provision and use of anonymous wallets. Cash transactions are also to be restricted for this purpose.
Global regulatory efforts for crypto assets are reaching a new high in the EU. BTC-ECHO has an unofficial draft from the EU Commission calling for new guidelines for the fight against money laundering and terrorist financing – and some of them are tough. For example, the provision and use of anonymous wallets should be prohibited in the future. In fact, the move amounts to a ban on privacy coins such as Monero (XMR) and zCash (ZEC).
This means that the EU assumes that every anonymous crypto wallet is per se of criminal origin. The draft states more precisely:
The anonymity of crypto assets exposes them to the risk of being misused for criminal purposes. The ban on providing and owning anonymous crypto asset wallets should further limit the ability to conduct anonymous transactions with crypto assets.
AML draft of the EU Commission
There is not yet an exact date when the regulation will come into force. The draft envisages ratification “on the twentieth day after publication in the Official Journal of the EU”, with subsequent implementation within three years. The EU Commission wants to reevaluate the regulation within five years, after which the evaluations will be continued every three years.
In Germany, the federal government has been using the “Transparency Financial Information Act Money Laundering“(TraFinG Gw) is taking stronger action against anonymity in Krypo-Space. In the draft law, crypto transactions of 1,000 euros or more are notifiable.
EU Commission: Restrict cash transactions from 10,000 euros
In addition to the restrictions on anonymous crypto wallets, the EU draft also provides for an upper limit for cash transactions at retailers. In future, this should be a maximum of EUR 10,000 throughout the EU. This applies to both individual transactions and several smaller transactions that are “related to one another”. However, member states can voluntarily lower the limit further. Private transactions have so far not been affected by the upper limit.
In addition, companies are not allowed to issue unregistered bearer shares (which also include crypto assets) in the future before they have been registered with a competent authority. Obviously, one wants to avoid an ICO wave like 2017.
The news agency also reported Reutersthat the EU Commission would like to propose the establishment of a new authority dedicated to the fight against money laundering. The Anti-Money Laundering Authority (AMLA) as the “heart” of a supervisory system, consisting of national authorities, should then, among other things, develop new transparency rules for transfers of crypto values.
Chainalysis: Illegal crypto transactions on the decline
It is hardly surprising that the EU is resorting to such drastic bans. After all, anonymous crypto transactions have long been a thorn in the side of regulatory authorities. How exactly the implementation should look like remains questionable. Ultimately, there are still options to use the corresponding services, for example by changing your VPN address.
The criticism that cryptocurrencies are generally misused for money laundering and terrorist financing are not valid. At least that’s what he sees Crypto Crime Report 2021 of the analysis company Chainalysis so. In the report, the US company found that the proportion of criminal crypto transactions fell in 2020. Accordingly, only 0.34 percent of all transfers were actually of an illegal nature. For comparison: in 2019 the rate was 2.1 percent.
In the report, Chainalysis also examined money laundering activities in the crypto space. So it was concluded that most of the funds would be laundered through a small group of service providers. These included classic money laundering service providers as well as cryptocurrency and fiat currency service providers with inadequate compliance rules. According to Chainalysis, law enforcement agencies should start here and target these providers in a targeted manner.
The fact that cryptocurrencies are often classified as the currency of criminals in regulatory circles cannot be confirmed using the Chainalysis report. For comparison: When the FinCEN files were published in September last year, a money laundering volume of 2 trillion US dollars became known, which large banks transferred for criminals or persons on sanction lists. Rather, the efforts of the EU to further restrict anonymity in the crypto space are likely to serve to guarantee tax revenues.