In December last year, there was an uproar in the German crypto scene. The reason for this was a proposal by the CDU/CSU in which the party wanted to enforce a more consistent fight against money laundering and terrorist financing. In this context, preventive regulations were to be created to combat the misuse of cryptocurrencies for this purpose. However, the crypto space harshly criticized the plan, as BTC-ECHO reported.
The proposal not only provided for stricter due diligence obligations for both the acquisition and transactions of cryptocurrencies, but also explicit prohibitions. For example, the mutual exchange of cash into crypto. The use and provision of so-called mixing services should also be made punishable.
But the crypto scene was particularly bothered by the requirement to register self-hosted wallets and the associated ban on interacting with unregistered self-managed addresses. When registering, it should be stated who exercises control over the wallet. At the same time, authorities should be given access to information on the wallets by law.
CDU MP Matthias Hauer defended the proposal at the time:
In the interests of equal treatment with common digital payment methods, we are also in favour of standards for identification applying to the use of digital payment methods…
As with all means of payment, the protection of privacy and financial freedom are important criteria for us when it comes to cryptocurrencies. These must be reconciled with society’s interest in protecting against misuse for criminal purposes.
Matthias Hauer (CDU) to BTC-ECHO
Criticism also came from the blockchain association Bundesblock. Board member Philipp Hartmannsgruber explained: “Firstly, the registration requirement or a transaction ban is not enforceable and secondly it is too severe a restriction of individual civil liberties.”
Traffic light votes against crypto proposal
But it will not come to that. As BTC-ECHO learned from circles in the Bundestag, the Union’s proposal was rejected today in the Finance Committee. The traffic light coalition parties voted against the proposal.
FDP member of the Bundestag Volker Redder welcomed the failure of the motion.
With its proposal, the Union is not only placing crypto users under general suspicion, but is also counteracting years of efforts to achieve uniform regulation in the crypto sector across Europe.
Dr. Volker Redder to BTC-ECHO
With the entry into force of the MiCA crypto regulation last year, crypto service providers and other financial institutions are already bound by special guidelines to combat money laundering and terrorist financing. “A German solo effort must therefore be consistently rejected,” Redder continued.
FDP colleague Frank Schäffler is of a similar opinion:
The Union’s proposal is based on a false assumption: the majority of money laundering is carried out using a state currency, the euro, by bank transfer or third parties, and not using private crypto assets.
Frank Schäffler (FDP) to BTC-ECHO
Matthias Hauer seems to have expected the rejection. His MP’s office told BTC-ECHO:
The Union faction’s motion was actually rejected in the Finance Committee. This rejection was to be expected because the governing coalition, with its majority in all committees, rejects all motions from the opposition factions and only agrees to its own motions.
Matthias Hauer’s MP office opposite BTC-ECHO.
The Union’s proposal is now off the table. There will be no further vote.
“Given the current poll ratings of the traffic light parties, however, one must consider what could happen with a new government next year,” says Philipp Hartmannsgruber. It remains to be seen whether the Union, which is currently experiencing a high in the polls, will then try again to subject the crypto sector to stricter rules.
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