EU plans to make Bitcoin transfers more traceable
bbc.com
bbc.com
When it comes to large financial operations, society has clearly chosen transparency over privacy. Cause guess what, tax evasion, money laundering, political fixing, terrorism financing are things that exist and really are hurtful to our economies.
Stop fantasizing that the government cares about the shit you buy. This is not about you.
And Bitcoin’s anonymity is not a feature of blockchain and never has been. There is the wallet, but who holds the wallet is not part of the protocol.
You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.
Everyone knows where the real money laundering and terrorist financing happens.
It is done by the likes of HSBC, Standard Chartered and other big banks.
This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files.
Our financial institutions are too rotten for you to even assume that the intention of this regulation is altruistic (i.e public benefit).
The tradition of regulation in finance is to perform a kind of scam called "regulator capture"[0].
It is what we have mostly observed to be the goal of complex financial regulations. For it to divert from this would be an exception.
[0]: https://www.investopedia.com/terms/r/regulatory-capture.asp
> It is done by the likes of HSBC, Standard Chartered and other big banks.
This used to be the case. And undoubtedly it still goes on. There simply weren’t many other mechanisms to launder money that didn’t involve large banks…until crypto joined the party.
Crypto’s most popular feature is speculation, and its second most popular feature is money laundering/capital control evasion. These two probably encompass well in excess of 99% of typical real world use cases.
I'd be more than happy if controlling capital joined the list of things government just can't do. I think freely flowing capital is going to be good for everyone. Good luck to the crypto community & I'm sure a big chunk of the world trying to get away from unreasonable US sanctions will agree.
The US and 'west' is already financially liberal, so we can make an observation: it is NOT good for everyone. Capital flows freely, but it flows upwards. Trickle-down economics is proven false. Advocating for more liberal finances also means being okay with leaving people behind and in the shit; the unemployed, the homeless, the working poor, the huge percentage of people who constantly live one paycheck or one medical issue away from bankruptcy, the people who work 16 hours a day at multiple jobs and still can't make ends meet, etc etc etc.
I mean to rephrase your claim, yeah capital / money should flow freely, but egalitarian. The wealth of an individual should benefit all. The richest countries in the world shouldn't have poverty on an individual level. There shouldn't be a case where a handful of people have more money than half the world population.
And I get it, building a space company and launching yourself into space is cool, but that money could also have gone to your employees to lift them out of poverty and insecurity.
Examples are basically any kind of crime and violence, traffic accidents, all kinds of things that harm people and societies.
Ya think ? People are indoctrinated from as soon as they start school. By the time they reach adulthood they are fully institutionalized.
You might not agree with every use of US financial might, but I do not think that a “big chunk” of the world are affected by US sanctions or that a big chunk disagree with US sanctions that exist. Most of these sanctions are against demonstrably hostile governments. The US isn’t perfect by any means, but cutting off NK, Iran, etc from international banking to extract nuclear compliance is, I think, a good use of sanctions.
It's the same side of the coin.
It's not like it's dominated by it - what makes us the largest part of crypto usage is speculative investors and bots. But as for the rest, it's clearly not normal people buying burgers, that's for sure.
> The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money.
> China’s Payment & Clearing Association said on Wednesday that the number of crimes involving the use of virtual currencies is on the rise.
> Because cryptocurrencies are anonymous, convenient and global in nature, “they have increasingly become an important channel for cross-border money laundering,” the association said in a statement.
Sounds right to me.
[1] https://www.cnbc.com/2021/06/10/china-arrests-over-1100-susp...
Can you provide a source on that? I certainly don’t want any Tethers but I know plenty of people that do.
What we have observed is financial institutions failing with respect to KYC/AML/CFT/sanctions etc. (and getting fined for it), but that is not regulatory capture.
Also, I'd argue that since 2008 regulatory capture isn't working so well anymore, with a lot of extra regulation being thrown at the system (some of which being eased now again).
Regulators are incentivized to see dangers everywhere and acting accordingly. The last time they did not see dangers everywhere, it didn't work out so well, either. The counteracting force would come for electorates and policy makers seeing opportunity and progress lost from being overly cautious.
I am in favor of privacy and not having to explain what you choose to do with your own money, but imho the aggregate yield curve of total privacy inverts as you ascend a logarithmic scale.
> It is done by the likes of HSBC, Standard Chartered and other big banks.
> This is public knowledge, as we have seen with the Panama papers and most recently the FinCen files.
No. This is an observational bias. All we know is that they do that. But the fact that they do that, too, does not logically imply that resorting to them is the only way of money laundering and that BTC is not used for that a) at all b) at a much larger scale.
And, as it happens, because of the records, it has been discovered and everyone involved is traceable. The system works.
The system does not work.
Everyone involved have been discovered by `rouges` like Assange that system holds in jail for either made-up or largely irrelevant accusations, out of the scope of their opus, full soviet style.
Everyone knows the king is naked and just comedians and activists at large (or in jail) has courage to say something about it, which is pretty medieval position for all of us to start with.
https://www.investopedia.com/stock-analysis/2013/investing-n...
It’s all public knowledge and pretty easy to find.
1. Stop central bank imposed inflation.
2. Serve the people who are excluded from banking.
If either of those goals can't be reached, it is due to misdesign/inherent flaws of the approach and not governments.
[1] https://twitter.com/sergueyz/status/1365041519154061315
The amount of illicit transactioins is higher in bitcoin than in regular cash ($100 bills to be precise). I guess the same is for money laundering - amounts spent in legal transaactions going through current financial institutions will be much higher than money laundering there. And ratio between amounts of legal and possibly money laundering transactions will be higher for regular institutions than for bitcoin.
Precisely because of regulations and their absence.
It’s never about you, until it is. You should assume the government will do the maximum amount of evil given the power they are granted.
This is the classic anti-privacy argument: this isn’t about you, you’re not doing anything wrong, you have nothing to hide, etc.
Sure, there’s a pretty good chance that a random person, e.g. you, isn’t the target of these policies. However, when applied to an entire population, these sorts of policies result in privacy violations on a broad scale.
I kinda doubt the filthy rich will be affected
Add to that: don't only think about what the current government will use those powers for, think about what future governments will use them for. If you're not okay with those powers existing when the party you don't like is in power, you should also be advocating against those powers when your own preferred party is in power. (That is, of course, unless you're a fascist and counting on your preferred party to perform a full 1933 Weimar Germany-style takeover that abolishes democracy.)
Why? Shouldn't you then assume that all people will do the maximum amount of evil given the power they are granted. And what exactly makes government different then other places where power is concentrated? For example, crypto miners.
Not OP, but you definitely should!
> And what exactly makes government different then other places where power is concentrated? For example, crypto miners.
One of them can send people-with-guns to your home to arrest you and take away your stuff.
Note that I'm not some crypto-anarchist absolutist, but IMO being weary and critical of governments grabbing more power is the right reaction.
All we do is make a glorified X every few years, allowed to choose between the plague and cancer. All they do is wasting our money and making life worse for everyone except themselves, their peers and the rich. It's like this at least everywhere in the western world.
If the last year hasn't shown you that, and the last decades didn't either, then I don't know what to tell you.
It most certainly isn't a choice we've made democratically.
Rather, it's a case of boiling the frog: a thousand tiny cuts inflicted by elected politicians over the very long term which has slowly led to the monster size leech our government has become.
Society votes for these governments.
I know, we all would prefer to argue that some shadow cabal decides what the government does and society has nothing to do with it, but at the end of the day it still stands: We vote for these people. We get the government we deserve.
How often have politicians of all countries said and promised to enact or revoke certain policies during their election campaign and then developed amnesia, stalled until outrage dies down or simply shrug until re-election time?
People don't always get the government they deserve.
It is better to say that society votes. It definitely does, but when every (and I do mean every) politician that gets in power can come right out and say that they won't do anything they promised it is not reasonable to say society voted for the governments they get. Society has governments and society votes, these two are unconnected facts because of an endemic and deeply toxic lack of accountability on the part of politicians. The lies are blatant, so much so that everyone expects them and sees them coming.
> We vote for these people. We get the government we deserve.
So, a poke in the eye, or a kick in the shin? Whatever you get, you deserve..
Agreed. IMO, what a society is/does/allows is always up for grabs…
Man made rules aren't laws of physics, and even those are bounded by our understanding/awareness of such.
Expecting others to be transparent, while governments go on about their private secret activities is very unfair.
Case in point - why hasn't any government adopted any open blockchain till date ? I mean, there are gazillions of operations that the government can use a blockchain for. OK, forget about a blockchain, at least an open distributed ledger ? For instance, all public RFPs and contracts can go on a queryable open distributed ledger. Why hasn't this happened yet ?
Let the governments show a spend log of every tax penny collected and then we'll talk about transparency.
(1) https://en.m.wikipedia.org/wiki/Senate_Intelligence_Committe...
Given that the existence of your examples and its horrors is very much common knowledge, at this point it is clearly not an issue of transparency. The people quite simply choose to be okay with it.
Big money laundering and state wide unethical operations always find a way to operate on the clear financial system. You are probably using some shinny brand device bought from a famous company that contains parts made by slave labor in a certain region of a certain country.
AML/KYC only affect small people. To comply with those regulations is expensive and time consuming and the punishments are heavy so its better to just remove anyone who has a slight hint of suspicious activity.
Because banks are terrified of being punished by governments they will kick honest person out of the system because they've sent money to their mother in some war thorn Middle East country. Thats it. You are banned from the platform with no right to appeal.
For fuck sake. You live in a world where Snowden is a fugitive, Assange is sickened in Jail and the literal criminal Christine Lagarde is the god damn president of the European Central Bank! YOU need to stop fantasizing.
I can tell you, as someone who works in finance, that KYC rules are taken very, very seriously. The bigger the client, the more important they become. There is harsh punishment from both my company if not the government if KYC processes aren't followed correctly. Losing your job is the least of your worries if you're complicit in a case like that.
Yet accountability is so great for big offenders that one day they might preside over the European Central Bank.
> There is harsh punishment from both my company if not the government if KYC processes aren't followed correctly.
And that's why banks will just kick Amir who has only 3000 EUR on his account out of the platform. Why risk such a heavy punishment for a poor bloke?
I invite you to visit the reddit pages for N26, Revolut and similar banks. I don't think those threads about accounts being closed without justification are made by terrorists and money launderers.
It's big of you to admit, but you'll pardon me if I take what you say with a grain of salt when you tell me the extremely problematic industry you work in definitely is not a problem. You have a vested interest to believe this.
Instead of society, read political elite.
A random voter cannot choose a politician who is totally aligned with him on all thousand important topics. Much less so in America, a two-party system, where your choice is binary.
As a result, whatever the top brass does with regard to most topics, is what they want, not what society wants.
Notably, big business and important people still enjoy a lot of economic privacy that is being denied to us.
Except they fucking do, otherwise I could walk down the road and buy my cannabis from a legal business.
How often does a career politician decide to step aside because someone else has better ideas?
All I'm saying is that there's no optimal solution here, it's all a balance.
I don't want to live in a government mandated box.
One of the biggest problems of the state has always been how to hold power accountable.
I can see a nightmare forming where one becomes a slave to their managerial class. Where everything is tracked and managed. No new ideas can form. No new paths can be taken. Everything is mercilessly beaten down as they don't obey the rules or the standards.
It all leads to stagnation and misery, and a few people making a killing off the backs of the majority.
Sure, very few people want to live in a total anarchy. But giving the state a total control over money and wealth seems like a complete solution to the too much freedom problem.
So we have to make a superior system inferior?
I never voted for any of those clowns in power
You can vote for someone who wants to reverse this, and it might change. Since this is pretty much an international system though (banks offering anonymous accounts will have difficulty interoperating with other actors), it’s likely not enough with political/public opinion in just one country.
From a 10 year old in the US to a 20 year old somewhere in Africa, bitcoin has no barriers and can be used just like that.
> You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.
So no, this statement goes against bitcoin and what it stands for.
You used to be able to do this at HSBC, and for a very long time, before all these annoying KYC laws
If you want to launder money there are people for that, they will take your money, set uou5 up with legitimate businesses, put your money into other businesses and over some time those businesses will order a ton of shit from your ones, so you'll end up with a lot of clear after-tax income.
To every person who downloads random phone apps and gives them mic permissions, who has Siri or Alexa listening all the time, or who has a Nest doorbell recording their street... probably?
The gov do care about what you buy.
This is quite a speculative & ambitious comment..
>Stop fantasizing that the government cares about the shit you buy. This is not about you.
...wot. You assume this is why folks want privacy in their transactions?
>And Bitcoin’s anonymity is not a feature of blockchain and never has been.
Bitcoin is psuedonymous, & always will be.
No more than America has chosen the 1% over 99%; or white lives over black.
The gov says "laundering, terrorism" in the same way it says "terrorism, paedophiles" in other civil liberties cases.
Then explanation of why a government should tax its citizens is usually the fact that those citizens use that countries infrastructure to make money, so that country should take "it's" cut.
But many countries now want to tax CG on cyber currencies that has nothing to do with any of that countries infrastructure. Why should a system of value that exists entirely without the support of the EU require a payment to the EU?
> You can’t show up in a bank with a bucket load of $100 bills and open an anonymous bank account. Well you shouldn’t be able to with bitcoins either.
Why? bills are backed by the country and legal tender as a result - BTC isn't. Bank accounts, and banks themselves, are nationally regulated w/ consumer protections - BTC wallets aren't. How are these two things similar at all?
Short newsflash:
People can - and do - pay for goods and services in cash.
Sometimes these transactions aren't declared.
If you insist on a written record of your transaction, sometimes the price goes up :)
None of these things are new, they've been going on since very shortly after taxation was invented!
No, I'm afraid governments already track all data necessary to pursue and convict tax evasion and terrorists. We don't need to sacrifice this new, exciting technology because of bureaucratic laziness and FUD. $800 billion defense + $200 billion law enforcement should be enough to track all dozen suspected domestic terrorists in the USA, and Interpol/Nato/EU share technology with the USA.
It is extremely common where I live, India. To an extent that, going by official statistics, paying tax is rare.
I agree with your second assertion though. The government is tracking more and more transactions by making it mandatory to use tax ID for transactions above a certain threshold.
While I do think there's a case to be made that it's none of the government's business how many times per week I visit Starbucks, my main concern is big tech companies, banks and insurance companies collecting this information about me, and using it to build a profile based on which they place me into different groups or more or less privilege, offer me different deals, or otherwise manipulate me and my behavior.
Government cares very much what people buy and worst yet companies care even more.
Believe or not society functioned pretty well before the surveillance zoo and people were able to spend their money without worrying about their privacy. For the 99% of people that aren't money laundering or tax evading, yes the right to privacy is important.
That said, you're probably right in the long run. Cash is already less convenient, and it's only a matter of time until it's gone. The "transparency" argument will win, for the arguments you've outlined: "tax evasion, money laundering, political fixing, terrorism financing" and anything the government can prosecute under those descriptions. And to add to the list, non-accredited investors having a flutter, people spreading disinformation, people we don't like etc.
I would also LOVE to see each and every transaction my state does but all I see is high-level budgets with no individual level transactions.
States and state institutions have much much greater "privacy" while the people are heading towards 0 privacy.
I would have expected the reverse to happen first but here we are.
The government most definitely cares about the shit you buy. If they had an infrastructure they would tax you and "nudge" you based on a lot of societal / individual metrics.
I would say the whole purpose of BitCoin was to counter government stupidity so this new regulation continues the trend.
If I die my estate can be dished out to family members via estate laws and the banks comply with it.. how does one liquidate cryptocurrencies when I die? My family will most likely not be protected in that case and the funds will be stuck forever.
money laundering: focus on catching the actual criminals and stopping real crime instead.
political fixing: privacy tech actually helps here. (Eg Secret ballot)
terrorism financing: terrorists don't need much money. Just a deranged mind, a hand gun or even a sharp sushi chef knife and a social media account are enough.
Well, it sorta is when this plan applies to everyone.
Buy one thing with Bitcoin with your shipping address and name and guess what, the seller can back track through the blockchain and knows your entire purchase history and crypto net worth.
Reading western media, I wouldn't rule out the possibility of being labelled as extremist for, say, supporting Trump, and consequently be cut off all services by companies that are owned by his political opponents. Twitter, Facebook, airlines, banks, ...
This total control nonsense will eventually end and these dinosaur idiots will stuck with their own destructive ideas
It increasingly feels like we are in a time when anything with any potential to harm the Regime (such as web, bitcoin, etc) just gets defanged and absorbed into the system. In a few years, your web browser will probably transmit the details of your mandatory TPM chip to facebook, netflix, etc so they can uniquely identify all devices with complete precision and deny access to unapproved (user-controlled) computers. Microsoft already only allows users to install other OSes/bootloaders on new computers by their good grace. The keys are theirs, not yours.
With bitcoin we already have KYC/AML ruthlessly enforced at every onramp/offramp. It is already very hard to transact between fiat and crypto without presenting some form of government-issued identification, and it will only get harder as time goes on, I don't see how you could reverse this process. And that culture shift is important because the people whose voices are most dominant within the "crypto sphere" today don't seem to give a shit, really. The crypto people we have now seem to lack the deep, fundamental commitment to human freedom, privacy, and security that was the animating force behind the creation of bitcoin. I desperately want to believe that it still survives and I'm just not seeing it somehow. But I simply can't.
It's probably because the few remaining crypto people, in the space dominated mostly by scammers, realized that crypto anarchy is something that's fun to read about in a sci-fi novel, not something you actually want to live in.
I'm a crypto OG, and I also mourn what this space has become. You are entirely incorrect in the last part of your sentence.
Over time, most of the people shilling "coin go up" memes have lost interest in bitcoin and have moved to other coins, leaving space for this kind of thing to develop in bitcoin.
Two: Crpyto-backed smart-contract stable coins (similar to DAI). (aka USD tokens without the need for the US financial on-off ramps).
Then watch this space skyrocket into the stratosphere.
I'm not sure what stablecoins have to do with anything i said.
Apart from that, check crypto trends and quickly you will notice that they are very few projects that care about it in any real way. Every major crypto now effectively all about centralization, not the opposite. For different reasons than the central banks, naturally. Still, the trends are hard to ignore.
Otherwise, we would already have crypto outright banned or fully decentralized by now.
However there are more and more truly decentralization projects. Anything that doesn't do KYC when related to crypto trading/exchanging - have to be
Don't focus on the short-term if you want to make serious money or learn a technology that will stick around.
EDIT: in other words, my question is actually whether your claim has relevance, considering how most crypto currencies aim to be public (or that's at least my impression).
Any real person using DeFi or NFTs is not using a privacy coins
I agree with most of crypto’s philosophy. But this obnoxious naivety makes me root for and materially support the other side.
Is there a word for this?
Also known as taxes.
> these dinosaur idiots
Taxman.
A state unable to collect taxes ceases to be a sovereign state.
Complex taxation that hides where you paid taxes (ie: VAT) or where your taxes went (ie: infrastructure or old persons pension) is what's at risk here.
Eventually this will lead to decentralized warfare with dao's fighting asymmetrically and not playing by the old rules.
Monero uses ring signatures and several other mechanisms to separate a transaction from the sender, recipient, and contents so that you can't reconstruct chains of transactions but you can still verify consistency across the blocks. Monero is reasonably private but it's still technically possible to rebuild some fragments of transaction chains even if it's extremely unlikely.
ZCash on the other hand uses Zero Knowledge Proofs to verify correctness of the blocks and the transactions without leaking information about the system (such as the sender, recipient, or amounts). ZCash is much more computationally expensive, needs to be carefully callibrated, and needs the founding keys to be safely destroyed following the bootstrap of the system to remain secure however it does provide stronger and more easily mathematically verifiable assurances of privacy. "The Ceremony" is a really good one-off podcast about the story.
But in general it is possible to have privacy preserving functionality in decentralised services, it just requires far more complicated maths and lots of statistics to make work correctly.
That Uniswap UI is out there and literally nothing can stop it.
That's awful. Hosted wallets are an invitation for "exchanges" to steal.
I have no idea how these new rules will play out, but I can image how exchanges might be forced allow only transactions with "sanctioned" wallets (i.e. traceable to person), and international exchanges not playing complying being blocked from to the EU market.
First I hear of that. In Germany, you have to report gains you got from trading/selling (both crypto-to-fiat and crypto-to-crypto), but not simply buying any. Do you have a source?
Afaik we also don't have taxable events, we just have income tax.
Relevant section:
"At present, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules. The proposed reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers. Today's amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing. In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector."
"In addition, providing anonymous crypto-asset wallets will be prohibited, just as anonymous bank accounts are already prohibited by EU AML/CFT rules."
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_...
Edit: More content.
1) The KYC/AML/CFT burden is high for financial institutions, too, it is not like they want to spend all that money.
2) The efficacy of the measures is not uncontested by academia, regulators, and financial actors.
3) The CBDC discussions tend to have a thread on anonymous wallets, so why not for other things, too? Not like every low value artwork is government registered.
What does not work is open defiance, because if policy wants it can come for "you". Usually easier to go for the person but do not underestimate the effect of committing billions to software disruption either.
There are valid policy and regulatory points to made about what exchanges people should have anonymously and the pendulum on financial regulation is probably just at one of its peaks...
Where should I send my Ledger to so i can be a good, obedient citizen and be compliant with this law?
It's interesting, because normally a bank/exchange would do that for you, but in this case, it's up to you to report which assets you own. The fact that it is possible is the interesting thing here.
That would only link you to one particular address.
Modern wallets are typically "hierarchical deterministic" as described in BIP32[1]. They generate new keys/addresses from a seed value as needed. To properly register such a wallet, you would have to provide the root public key from which all addresses can be derived (but not private keys).
The UTXO "privacy" model of Bitcoin has never worked out, and more modern cryptocurrencies aren‘t even attempting anything like it anymore.
On Bitcoin SV, basically a high-scale version of Bitcoin, there are today several wallets taking smarter approaches to privacy. HandCash's Output Bills [1] for example splits outputs into fixed denominations like cash, and Paymail [2] is a email-like addressing scheme to avoid sharing addresses publicly. I'm sure more approaches will be tried too now that wallets have some freedom to experiment.
[1] https://handcash.medium.com/introducing-output-bills-a-coin-...
But unlikely you'll know what i bought
As a business/service, or in general? If the latter, then it's literally a ban on cryptography.
Right, because it's generally recognized that countries have the right to protect their borders
> not sure why you can't have a rule that you can't have undeclared crypto wallets
Are you exempt from this if you don't make cross-border transactions? Would it be constitutional for the EU to make a rule that you can't have undeclared cash wallets?
> That does not ban cryptography, that just forces people to declare their wallets.
In the strict sense you're correct. However, I would counter with saying that this isn't a "ban on cryptography" in the same sense recent proposals for key escrow (eg. https://arstechnica.com/tech-policy/2017/11/as-doj-calls-for...) isn't "a ban on cryptopgrahy". However, the end result is the same: you won't be allowed to practice cryptography unless you also give up your secrets to the government.
In any case this kind of thing will be implemented by mandating it at the exchanges where crypto is converted to/from traditional currencies, making it impossible to actually use crypto (legally) without complying.
For the people that it isn't enforceable for, they're stuck either moving countries, hodling eternally, or laundering the cash they get in return for their crypto assets.
Yes, you'll be able to break the law if you turn to a hawala payment system, but I can also break the law against murder by hiring a hitman. That doesn't mean laws against murder are completely uneforceable.
> As a business/service, or in general? If the latter, then it's literally a ban on cryptography.
There are more applications of cryptography than cryptocurrency, which is why the term "crypto" for cryptocurrency was so unfortunate. It pretty much erased the prior established usages, leading to lots of confusing situations.
This could ban cryptocurrency (the tells are focusing on terms like "assets", "wallets", and using Bitcoin as an example), but it doesn't sound like it bans cryptography (if it did, tells would be "keys", "messages", etc.).
In terms of money laundering for the rich, that's all through 'fine art' and real estate.
Well, according to the EU, not yet.
However most member states already have that in place including far lower limits.
In Greece all cash transactions above €500 have to go through an AML due diligence process which includes a full KYC for both the buyer, seller and any beneficiaries of the transaction.
Basically it’s too much of a hassle to do so businesses simply do not accept cash, so anything from paying for a Hotel stay to buying a Laptop isn’t possible without a mountain of paper work which means it’s impossible in reality.
And this applies to trivial things as well, such selling a used bike or laptop to someone?
Where I'm from basically anything above 1000€ you're legally prohibited from using cash and might be f8ned for it.
Direct GBP pairings didn't exist, so choices were either go through a USD denominated service or through multiple pairings, losing a high % each time and/or gas fees in uniswap etc.
None of the forex efficient services like Wise or Revolut will wire money to US crypto exchanges.
In the end I didn't bother. People really underestimate how quickly regulators can snuff out mainstream crypto.
Of course when converting to Fiat money they have a chance to ask for ID but I don't see this happening with bitcoin to bitcoin transactions unless the whole protocol is changed around.
- the regulated crypto industry can form a mining cartel that only approves tx between whitelisted addresses and orphans any attempt at doing otherwise (a 51% attack), to save their investment in the "number go up" game.
- the regulated industry can at transaction level reject any output that is not, transitively, formed only of whitelisted addresses. Unapproved transactions could still be mined and used between unapproved participants, but it would cause a split inside the network with a BTC-dark (all contaminated outputs) and BTC-clear (whitelisted only) and an (underground) exchange rate between both would emerge, analogous to some third world fiat currencies with a regulated fixed government exchange rate with say USD that differs from the street rate.
The latter is already emerging in a way with discounts for paying ransomware in monero (which gives an implied xrate between tainted BTC and clean BTC) as a response to the small amount of blacklisting clear exchanges have started doing.
Corruption anyone?
They sunk tens of thousands of community dollars into i2p integration instead of simply using Tor.
Multi-sig was totally impractical last time I looked.
Can't comment on atomic-swaps though. If that works that would make it useful.
Also tens of thousands are practically nothing. The general fund currently holds more than 22 millions USD worth of monero.
It's easier to hide in the larger pool of users.
Does that include open source wallets that you can run in your own computer, like Electrum?
That’s not a real thing
If customers can‘t deposit or withdraw money to an exchange, that makes the exchange effectively inaccessible to customers in that jurisdiction.
(All cases I can find are either local EU companies or large multinationals who do have boots on the ground in the EU.)
Source?
guess what, Mr. Commissionaire? Bitcoin isn't a company and you don't need to ask companies to transfer crypto assets
edit: this just shows how little power they have over the network, so they will tyrannise the middlemen instead
You don't need to ask a company to commit a crime you're still going to get punished.....
The vast majority of EU citizen are using some kind of exchange as an onramp and offramp. Those exchanges will do KYC and happily turn over any addresses they send/receive crypto too.
Then can then set a recurring payment for their account and you automatically receive the BTC in your address.
I say this is a good compromise that should make people a bit more satisfied. You didn't needed to send a face mug to the Exchange and on the other end the bank that holds your IBAN already KYCd you into oblivion.
And that alone is going to make tax evasion or laundering a lot harder, and probably makes it a way less attractive asset for criminals.
It's still a huge invasion of privacy etc., completely unjustified and unethical etc., but let's not get too worked up over what seems to me like a fairly predictable shift in which businesses are subjected to KYC/AML regulations. The more reputable exchanges have basically been assuming that these rules applied to them all along. Unhosted wallets and direct transfers between them are unaffected since they don't involve a Crypto-Asset Service Provider. Centralized exchanges were always an awkward stop-gap measure in any case, not a fundamental part of the crypto ecosystem. If this encourages people to trade directly through the decentralized network and avoid CASPs wherever possible, so much the better.
Buy a car? -> IRS can see it. Buy a home? -> IRS can see it. Buy a Smartphone? -> None of anyone's business.
Companies on the other hand should have no such privacy allowance, unless they request and register it with the government and are forced to report any transaction made by them, where the level of detail of the transaction may vary (ie to hide the recipient of a weapons transaction, governments wouldn't approve otherwise, since they like to do shady stuff). The more detail is hidden, the more suspect the transaction will become, but will not appear anywhere public.
I'm not sure how feasible this is, but this would be somewhat similar to the distinction of cash and electronic transactions, with far better control on the amount of spendable cash and a good visibility of the transactions to the IRS.
The way to make sure everyone pays taxes is to tax property, or sales, or do a value added tax. Want a progressive tax? Higher taxes on second properties, or luxury items. Now you don't have any reason to need to know what everyone in the world has or does with their money.
No, I don't want the IRS to see what I spend a zillion dollars on, I don't want the IRS to exist. The comment you're replying to is mostly a sketch of how you pay taxes without some government agency sniffing your butthole.
It isn't about being afraid, it is about what's my business and what's your business.
You can't browbeat people into agreeing with you by comparing them to evil bad man.
As the sibling links, the answer is anonymity for spenders, but not for recipients of money. This also, ideally, blocks moral panics and instead forces law enforcement to go after cash flow into 'bad activities' and actors.
If you're constantly maxing out your cap and buying normal stuff without that privacy-enabled money, it may well raise eyebrows in the IRS.
It's not a per-transaction cap, but a monthly allowance.
[a] The history of finance is the history of financial crime. Jews starting banks because of Christian usury laws, the Medici sidestepping the monetary power of the church and kingdoms, etc.
Most societal advancements are crimes in the beginning as those in power disagree with the new ideas of the subjects. Civil rights, religious freedom, even literacy itself was deemed to be dangerous and unacceptable in their times.
Breaking laws like this and ignoring government bureaucracy is actually quite a noble act and should be encouraged as much as possible.
It might be that 'most societal advancements are crimes in the beginning' but it doesn't follow that most new kinds of crime are societal advancements.
" (8)‘crypto-asset service provider’ means any person whose occupation or business is the provision of one or more crypto-asset services to third parties on a professional basis; "
"‘crypto-asset service’ means any of the services and activities listed below relating to any crypto-asset:
(a)the custody and administration of crypto-assets on behalf of third parties; (b)the operation of a trading platform for crypto-assets; (c)the exchange of crypto-assets for fiat currency that is legal tender; (d)the exchange of crypto-assets for other crypto-assets; (e)the execution of orders for crypto-assets on behalf of third parties; (f)placing of crypto-assets; (g)the reception and transmission of orders for crypto-assets on behalf of third parties (h)providing advice on crypto-assets; "
which is extremely broad. In particular
'" (14)‘the execution of orders for crypto-assets on behalf of third parties’ means concluding agreements to buy or to sell one or more crypto-assets or to subscribe for one or more crypto-assets on behalf of third parties; "
is the most worrying - it appears to make block generation itself illegal (because of the kyc requirements) on any blockchain that can do anything more than simple transfers (which includes even bitcoin), because every transaction could be a dex swap of some type, knowingly or unknowingly to the block generator.
On the other hand, the additional point is
"Crypto-asset service providers that are authorised to execute orders for crypto-assets on behalf of third parties shall take all necessary steps to obtain, when executing orders, the best possible result for their clients taking into account the best execution factors of price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order, unless the crypto-asset service provider concerned executes orders for crypto-assets following specific instructions given by its clients."
so clearly the intention was to regulate cexes, but the definition language is dangerously broad. If interpreted in the most strict way, it would basically make all blockchains that can't run on anonymous home nodes force every user to kyc - while anonymous home nodes would break the law, it would be unenforceable without China-style network filtering at least.
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...
nobody asked them for this and even if this change ends up in bitcoin's core, it will ultimately fail to reach consensus
our wallets are none of your business, EU, get out!
Tech doesn't rule the world. Old power structures are still in place.
EU can come up with new laws all day every day, but considering the technical detail, these laws will be impossible to enforce
I expect a parallel, dark economy will still be around, where people transact with cryptocurrency and can only exchange it for cash.
I don't see this law as impossible to enforce, but rather, difficult to enforce. The government will still try, and most likely succeed in catching several institutions that don't comply. Governments don't actually need thorough enforcement for laws to be effective.
Being easily capable of breaking a law does not mean that the law is unenforceable.
Banning exchanges may actually accelerate the transition to decentralized finance.
I very much support the policy. Anonymous money pretty much serves one thing uniquely well which is avoiding the law, sanctions, laundering money, buying drugs or funding crime and I don't think any society has interest in having these markets exist outside of the purview of the state.
it's apparent, that money launderers, drug buyers, criminals communicate using words
I'm in favour of regulating and tracing cryptocurrency. I don't think people should be able to sell kiddie porn, bribe officials, scam innocent people or launder money with impunity. I think lots of people would agree with me.
>government knowing every single transaction of yours plus being able to confiscate every single e-penny at will.
That can already happen with or without crypto.
When you drill this down, it seems they are really outlawing certain math.
People have been successfully brainwashed into believing that money transfer is equivalent to murder.
The premise is stupid.