European Commission Targets’ Crypto Wallets’ and Citizens’ Privacy 

Jul 21, 2021

The European Commission (EC) is targeting cryptocurrency wallets and EU data protection with the announcement of an “ambitious package” of legislative proposals which, if implemented, would restrict the privacy of EU citizens.

European Commission aims at “crypto wallets” and the privacy of citizens

European Commission aims at “crypto wallets” and the privacy of citizens

“Today’s actions will significantly improve the existing EU framework by taking into account new and emerging challenges related to technological innovation. These include virtual currencies, more integrated financial flows in the single market and the global nature of terrorist organizations, ”said the European Commission.

These recommendations, they say, will help create “a much more consistent framework for easier compliance with AML / CFT rules”. [chống rửa tiền / chống tài trợ khủng bố], especially for those who operate across borders ”.

Important points about cryptocurrency from recommendations:

The proposed reform would extend the EU AML / CFT rules to the entire crypto sector.

All service providers are obliged to subject their customers to due diligence.

The changes “will ensure full traceability of the transfer of crypto assets such as Bitcoin”.

“Anonymous crypto asset wallets” are banned.

In the proposed revised regulation on transfers, the EU discusses “custodial wallet providers” and states that “wallet address” means the account number guaranteed by the service provider, cryptographic or alphanumeric code for wallets on a blockchain.

The EC also added that the new proposals for an AML / CFT framework will regulate “the scope” of the Anti-Money Laundering Directive.

The Commission has bid for the exchange of cryptocurrencies – with activities proposed in the proposed European Commission Regulations on Cryptocurrency Investment Markets (MiCA) and in particular the exchange of one cryptocurrency for another.

“These proposed rules prohibit the ability to open or use anonymous crypto accounts,” they added.

The EC also proposes an obligation for all crypto service providers involved in the transfer of electronic funds to collect and make accessible data on originators and beneficiaries, transfer of virtual assets or cryptocurrencies in which they operate.

Meanwhile, the European Commission also states that these proposals aim to “strike the right balance between addressing these threats and meeting international standards without burdening them”.

On the contrary, these proposals will help the EU crypto asset industry grow as it will benefit from an updated and harmonized EU-wide regulatory framework.

The legislative package is now being discussed by the European Parliament and the Council. In addition, the EU hopes that the European Anti-Money Laundering Authority (AMLA) will start working by 2024. However, the body will start direct oversight “a little later, after the directive has been transformed and a new regulatory framework begins to apply”. The AMLA will be the central coordination point of the national authorities “to ensure the correct and coherent application of EU regulations by the private sector”.

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