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EU will monitor consumer wallets

 


The new regulation is coming and it is rather bad in terms of privacy. In order to prevent money laundering and terrorist financing, all transactions from and to central service providers should be monitored, starting with the first euro. This is intended to close all gaps, as stated in a press release .


If a transaction with cryptocurrencies reaches or exceeds the value of €1,000, the service provider must also ensure that the wallet also belongs to the respective customer. This entails additional controls and is intended to clearly identify the beneficial owners in this way.


The only exceptions to this are transfers between so-called unhosted wallets, which in principle affects all transactions between consumers or private individuals.

Cat and mouse game continues

The approach is well-intentioned, but the EU will not put an effective stop to crime. Recently, exchanges and brokers have been using technology to monitor the blockchain and are wary of doing business with addresses that are already suspicious.


This means that criminals have to put up with major detours if they want to be able, for example, to convert cryptocurrencies originating from illegal activities into "hard" euros or US dollars. If these are assets from a large-scale hack, then things look even worse for them, because practically the whole world is watching what happens to the funds.


For every gap you close, a new one will eventually open. That may be in the nature of things. In the end, consumers still suffer, because the crypto service providers and exchanges collect the most intimate data, but can rarely guarantee the same data protection as domestic banks. This is proven by various hacks and leaks, in which copies of ID cards, proof of salary and other documents that are common for KYC procedures ended up in the network. According to the most recent decision, no personal data should be passed on if data protection cannot be guaranteed, but it is still unclear under what circumstances this is the case in each individual case.


Positive for exchanges and brokers

In the end, however, none of this will matter for the exchanges and brokers, because they are already sounding out their customers thoroughly. In the end, they are lucky because they are able to continue their business and have one set of policies that apply across the EU.


So far they have had to deal with a regulatory patchwork quilt, because each member state has its own rules, but in principle implements the same regulations or the Travel Rule of the FATF. So the drama surrounding MiCA and the associated implications also has something good.

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