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The EU’s parliament, commission, and council are set to initiate discussions on the issue of anti-money laundering rules for cryptocurrency transactions.
According to CoinDesk, this step will be the last towards the passing of laws and measures that many industry experts have dubbed to be a privacy killers and stifle innovation.
Many in the industry question the premise that tough new rules are needed against a tide of criminal behavior, but more pragmatic voices are looking at the legislative details that could prove crucial – such as how the law will treat small payments and unhosted wallets, as well as when the new law would take effect.
Thibault Schrepel, a blockchain law expert, told CoinDesk, “it could constitute an unfair intrusion into personal affairs that could invite a legal challenge.”
Once enforced, the legislation would require cryptocurrency providers to verify customer details and report suspicious transactions to the authorities. The regulations will also cover transactions from unhosted or self-hosted cryptocurrency wallets – addresses that are in the custody of private users.
The law is being designed to bring cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin in line with AML requirements for normal payments of over EUR 1000.
In practical terms that may not make much difference, according to a recent blog by Oldrich Peslar, head of legal at the Rockaway Blockchain Fund.
“I do not think that this is some tragedy” to apply checks to small crypto payments, Peslar said, because it is “all information any compliant service provider could already have,” and gathering it “is not an administrative burden nor any invasion of privacy.”
This came after the European Parliament lawmakers backed applying tough money-laundering rules to the industry, arguing the rules were needed to curb crime as part of an EU anti-money laundering package.