EU Crypto Vote Sees Lawmakers Ban Private Transactions on the Blockchain

The European Union (EU) has been a hotbed for crypto news in recent weeks. The body, which governs over the majority of Western Europe, has been preparing cryptocurrency proposals at breakneck speed, attempting to rein in and control the asset class. While some proposals are progressing through the process with ease, others are stopping dead in their tracks. Today’s EU crypto proposal is earning the favor of lawmakers, and it could have a widespread effect on blockchain anonymity.

An abstract concept image for blockchain and cryptocurrencies.
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March has been a particularly busy month for European legislators and digital money. The body’s Markets in Crypto Assets (MiCA) proposal took up a significant share of the news cycle, especially one controversial amendment. The broader proposal was an inoffensive attempt to establish a framework for crypto regulation in the Union. It requires projects to publish white papers upon launch, exchanges to obtain licenses and other requirements with which not many would argue.

However, one sneaky amendment to the proposal, added a day before the vote, would essentially bar Europeans from being able to trade some of the largest cryptocurrencies in the world. Indeed, a ban on proof-of-work cryptos would include Bitcoin (BTC-USD), Ethereum (ETH-USD), Dogecoin (DOGE-USD) and a whole host of other networks. Luckily for investors, the proposal was shot down by a slim majority, even as the broader MiCA bill passed.

EU Crypto Vote Will Make Privately Trading Crypto Difficult

Now progressing up the ladder of the EU, crypto looks like it will see regulation on the continent. In the wake of the proposal, several other crypto-centric policies are cropping up, to mixed support. One new EU crypto proposal passed today, and crypto investors aren’t excited about it.

Earlier in the week, lawmakers introduced an amendment to its transfer of funds policy. The policy, meant to crackdown on money laundering and other illicit financial activity, is being broadened to eliminate crypto as an avenue for these crimes.

The amendment seeks to force crypto services to implement know-your-customer (KYC) requirements. Without KYC, users can transact digital assets without giving up any identifying information. Therefore, these requirements will allow investigators to track funds if they suspect them to be part of illegal activity.

According to the amendment, the requirement extends across all crypto services, from exchanges to wallets. These services must collect identifiable information connecting individuals to accounts that make transactions greater than 1,000 euros. This spells trouble for unhosted wallets like MetaMask and Trezor, neither of which have KYC requirements.

Over 90 lawmakers voted in favor of the amendment today. From here, the amendment will enter a “trilogue” period, in which lawmakers can bargain over the terms of the policy.

On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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