Coinbase is calling on the public to oppose the EU’s amendment to the “Transfer of Funds Regulation”

Coinbase disagrees with EU’s requests

Coinbase is calling on the public to oppose the EU’s amendment to the “Transfer of Funds Regulation”, which requires exchanges to collect, verify and report information on non-customers using self-hosted wallets.

If the Transfer of Funds Regulation was adopted, this revision would unleash an entire surveillance regime on exchanges like Coinbase, stifle innovation, and undermine the self-hosted wallets that individuals use to securely protect their digital assets. The vote will likely take place this week so time is running out.

Here are some of the “bad facts” which lead to the “bad law” that Coinbase has indicated:

(1) digital assets like Bitcoin, Ethereum and others are a primary way criminals hide and move money
(2) law enforcement has no way to track these movements
(3) requiring collection and verification of personal information associated with self-hosted is not a violation of their privacy

The truth is that digital assets are in general a markedly inferior way for criminals to hide their illicit financial activity. That’s why, according to the best research available, by far the most popular way to hide illicit financial activity remains cash. Unlike cash, law enforcement can track and trace digital asset transfers with advanced analytics tools. None of this requires upsetting the settled privacy expectations of wallet holders because the open architecture underlying digital assets is public and offers unprecedented transparency into transaction details. The records are also permanent — no one (not crypto companies, not governments, not even bad actors) can destroy or alter information.

In short, digital assets and the immutable nature of their blockchain technology actually enhances the ability to detect and deter illicit activity. But rather than embracing and leveraging the benefits that arise from the increasing use of digital assets, the EU’s proposal would cast them aside and impose a host of new privacy invasions on wallet users.

Among the worst of the proposed provisions are new obligations on exchanges to collect, verify and report information on non-customers using self-hosted wallets.

Another dangerous provision would require exchanges to inform “competent authorities” of every single transfer from a non-customers self-hosted wallet equal to or greater than 1,000 EUR — regardless of any suspicion of bad activity. The proposal even leaves the door open to a total ban on transfers to self-hosted wallets even though there is no evidence that such a ban would have any impact on the illicit activity at all.

“There’s precious time to act and we need to make our voices heard. A vote on Parliament’s draft proposal could come as early as Thursday, March 31st. If you care about protecting the privacy of individuals, and focusing the law on solutions that actually address legitimate concerns about the illicit use of digital assets, now is the time to speak up and be heard. We must speak with one, strong voice against this proposal before it’s too late,” Coinbase asks the crypto community to have strong reactions to this proposal before it’s too late.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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