Lawmakers in the European Union (EU) are making it hard for crypto traders to invest in digital currency while remaining private. Regulators say they are working to make it so that money laundering in the crypto space never happens again. As a result, they are implementing new rules that will require all crypto exchanges and trading platforms to obtain, hold, and submit information on customers involved in digital currency transfers.
The EU Is Coming Down Hard on Crypto Traders
The situation is something of a two-sided coin. On the one hand, the crypto space has been marred by crime since it first emerged. Many incidents, such as Mt. Gox and Coincheck, are so big that to this day, there are still several people that do not see the digital currency industry in a positive light. They see it as a haven for criminals; a place in which one can easily commit digital crimes and steal money they did not earn.
At the same time, the entire crypto industry was designed to be decentralized and give traders financial independence. These kinds of regulations can basically be labeled as “spying.” Third parties are given permission to snoop on traders and gather information about their dealings. In many ways, this goes against everything that digital currency is about, and traders in the EU are at risk of losing their privacy.
Regulators are making it very difficult for crypto traders to remain quiet. They are also implementing a rule that would require all trades beyond $1,100 to be reported. Compare this with the new regulations set in place by last year’s infrastructure law in the U.S. Verbiage of that law clearly states that all crypto transactions beyond $10K must be reported to the IRS and related agencies. While the move is shaky, $10K is still a relatively large number. $1100 will likely put most traders in the EU in jeopardy.
In addition, users receiving even the smallest amounts of crypto would also need to be identified to authorities by their respective exchanges. While this is all allegedly being done to stop crypto money laundering, several industry heads are taking serious issue with the new rules.
Brian Armstrong Isn’t Happy
Brian Armstrong, for example, is the CEO of popular crypto exchange Coinbase. He’s seriously against the regulations being implemented by the EU, commenting in an interview:
Imagine if the EU required your bank to report you to the authorities every time you paid your rent merely because the transaction was over 1,000 euros. Or if you sent money to your cousin to help with groceries, the EU required your bank to collect and verify private information about your cousin before allowing you to send the funds. How could the bank even comply? The banks would push back. That’s what we are doing now.